Employee Retention Credit for Restaurant – Can You Still Apply?
The pandemic times have been difficult and have hit hard on entrepreneurs. Many small business owners had additional stresses about being responsible for the incomes of their employees. Luckily, the government came up with a relief program to help small businesses claim taxable refunds.
Despite the relief programs, there are constantly changing guidelines and requirements that make the application process for these relief funds quite tedious and time consuming. The employee retention tax credit is one of the relief programs available for small businesses and business owners.
What is the employee retention tax credit?
Employee retention credit, abbreviated as ERC, is a refundable tax credit that is equal to 50% of qualified wages paid between March 12, 2020 and January 1, 2021, against specific employment taxes. This relief was developed initially as part of the Coronavirus Aid, Relief, and Economic security (CARES) Act with an overarching goal of retention of employees.
Several amendments have been made on the ERC since 2020 such as the amendments to apply to wages paid before October 1, 2021, albeit with the exception of recovery startup businesses which were allowed to keep the original deadline of January 1, 2022.
How do you apply for the ERC?
The application process of an ERC form can be quite tedious, overwhelming and time consuming. As the owner of a business who needs ERC credit for restaurants refunds, you can contract an expert in finance and taxes to help you through the entire process. The essence of hiring an expert tis to ensure that you do not leave a lot of money on the table when making your applications.
Initially, the amount of money set aside for these refunds was 26 000 USD per employee. But usually, employers are only awarded about 10 000 USD per employee. It requires the experience, expertise, and keen analysis of an expert to help you earn more from the refund relief provided by the government to small and mid-range business owners.
Even though the ERC program is over, employers can till make claims on the employment retention credit u to 2024. According to the rules, employers have about 3 years after the termination of the program to file for the quarters that were eligible for ERC tax refunds, even those who received PPP loan. The application process for the ERC refunds look different than before if you are filing after September 30, 2021.