Fort Lauderdale Employee Retention Tax Credit Lawyer Helping Employers File for a Tax Credit in Florida
In the years 2020 and 2021, countless businesses suffered the effects of a worldwide pandemic, and many small businesses shut their doors for good. In an effort to help businesses stay afloat and keep the workforce employed, the Federal government launched the CARES Act, which included a special tax credit meant to help employers keep employees on the payroll. However, understanding who can file for ERCs and how to receive them can be overwhelming to many business owners. Our firm helps employers navigate complicated tax laws and understand how to receive ERCs.
What Is the Employee Retention Credit?
Employee Retention Credit (or ERC) is part of the CARES Act. It is a business relief provision that creates a refundable payroll tax credit for eligible employees during certain periods of 2020 and 2021. Small to midsize businesses can receive a significant percentage of qualifying wages paid between March 13th and December 31st, 2020. The maximum amount an employer may claim per employee is $10,000.00.
Recent updates also include wages paid until June 30, 2021, with the maximum amount per employee increased to $14,000.00 and set a higher percentage of qualified wages that can be claimed per employee. Businesses that received a PPP loan may also be eligible to receive ERCs.
Who Is Eligible to Receive the Employee Retention Credit?
The Employee Retention Tax Credit is meant to help businesses that suffered revenue losses due to the government-imposed mandates due to COVID in 2020 and 2021. There are many eligibility requirements a business must fulfill in order to receive the Employee Retention Tax Credit.
First, the business needs to be in the private sector or a tax-exempt organization. Second, the business must show it suffered a partial or total shutdown due to COVID-related mandates. Next, the business must demonstrate that its gross receipts were 50% less in 2020 than they were in the same quarter in 2019. For 2021, your gross receipts must be 80% less than in 2020.
Those who are self-employed cannot receive ERC for their own wages but may receive ERC if they have employees working for them. Government and state entities, as well as political divisions, are not eligible to receive ERC for 2021, with the exception of tax-exempt public colleges, universities, and hospitals. It is important to understand which employees you may claim to receive the credit. If you had more than 100 full-time employees in 2020, you may claim ERC only for those employees who were not working but remained on your payroll. Companies with less than 100 full-time employees may claim credits for all employees regardless of whether they were working or not. For 2021, the threshold was raised to 500 employees, allowing companies with less than 500 full-time workers to claim credits for all of them, while those with more than 500 employees are still only allowed to claim credits for those who are not working but still employed.
Can You Still Get Employee Retention Credits Beyond 2021?
The CARES Act and several other pieces of legislation are constantly updated, and deadlines continuously changed, creating some confusion among business owners. It is estimated that only about 8% of business owners have taken advantage of the Employee Retention Credit, with the majority of business owners unaware that they may claim credits for their business.
Fortunately, eligible businesses may retroactively claim ERCs for wages paid after March 12, 2020, as long as they have not claimed the credit and have suffered or recovered from a significant decline in gross receipts. The money is still available in 2022, and business owners have three years after the end of the ERC program to claim their credits for the years 2020 and 2021.
How Can an Employee Retention Tax Credit Lawyer Help?
Legislation that can impact your business can be hard to understand and keep up with, but the truth is too many eligible business owners are likely missing out on the chance of receiving extra funds that may make all the difference for them and their employees. Even after the nationwide shutdowns due to the pandemic are largely over, businesses are still feeling the aftereffects of the global crisis that started in 2020. If your business is eligible for ERC – or if you are simply unsure and are struggling to understand the legislation, working with an attorney who is knowledgeable in helping employers navigate tax laws is a sensible first step.
The Law Office of Ray Haselman in Fort Lauderdale focuses solely on helping individuals and businesses with all their tax-related needs. Tax Attorney in Fort Ray Haselman can help businesses of any size to maximize their tax credits, understand how updates to tax laws may impact their business, and work out a plan to remain tax compliant while leveraging credits and deductions to help their businesses thrive in any economy. The Employee Retention Credit program may offer a feasible solution for business owners to get some financial relief during challenging times without the need to pay it back. Unlike other programs such as PPP, the ERC is not a loan and is thus considered a fully refundable tax credit. Our firm can help you with business tax preparation and assist you with verifying your eligibility for ERCs. If you are a business owner in Fort Lauderdale or the surrounding areas, contact the Law Office of Ray Haselman for professional, knowledgeable tax advice to help your business continue growing strong. Call our office at 786-522-0410 to learn more.