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Los Angeles, Dec. 30, 2022 (GLOBE NEWSWIRE) — Los Angeles, CA Emergency Credit Advisors said the Employee Retention Credit (ERC) program is an opportunity for small businesses to get new funding from the government for their current jobs due to the Covid-19 pandemic. Unfortunately, determining if one’s business is eligible and how much can be challenging. This is a tax credit introduced by the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act to encourage businesses to keep employees on during the 2020 pandemic. This is provided by the Internal Revenue Service (IRS) in 2020 and 2021 for workers with wages up to $26,000.
A business owner calculating their company’s employee retention loan repayment amount. Image credit: Alfexe / 123rf.
Eligible businesses may receive up to $26,000 in tax refunds from the IRS for each employee in 2020 and 2021 on payroll, and there are a variety of ways to qualify, including business interruptions, closures or loss of income. Companies have up to three years to claim the tax credit on their amended IRS 941-X returns.
The problem is that there are many rules and regulations that govern the ERC credit and many reforms have been made, which are impossible for businesses to know on their own. What businesses can do is find an ERC service provider that can provide expert advice and assistance in determining whether they qualify and accurately calculate the amount of ERC credit,” said Marty Stewart, chief strategy officer at Risk Loan Advisors (DLA).
To claim the Employee Withholding Credit, businesses do not need to consider whether it is appropriate to claim this tax credit because it is the amount they paid to the IRS for their total wages for the quarter as reported on their 2020 and IRS Form 941 Quarterly Payroll. 2021 business tax filing years. It’s important to note that for the 2020 tax year, the ERC credit was equal to 50 percent of qualified wages and also included qualified health plan costs that qualified employers pay for their employees. This ERC credit is based on qualifying wages paid after March 12, 2020 and before January 1, 2021.
The maximum amount of wages that can be considered for claiming an employee retention credit is $10,000 for all calendar quarters for employees. And the maximum tax credit for a qualified employer paid to any employee in 2020 is $5,000 per employee. For W-2 payroll in 2021, the eligible ERC credit for any employee paid in 2021 for a qualified business is $7,000 for each employee for each quarter for the first three quarters only. This amounts to $21,000 per employee for 2021, that is, if the business is not a start-up company. Startup companies, starting in the fourth quarter of 2021, may request an additional $7,000 per employee.
There have been several IRS rule changes to the Employee Retention Credit program, resulting from ERC rules, regulations and laws passed over the years, making it confusing and impossible for business owners to know if or how they qualify. You can claim more as a tax credit. After SBA funding for the EDL program ran out, many business owners had to turn their attention to other government programs. But because of the complex and confusing rules of the ERC loan program, many tax professionals, CPAs, and business owners turn to companies that have teams of financial tax professionals who specialize in government programs like the ERC loan program. .
ERC services such as Disaster Loan Advisors™ (DLA) are only useful because many employers cannot take advantage of all available relief funds, such as the Employee Retention Tax Credit, which is misunderstood and confusing. Done right, a business owner can get up to $26,000 in wages for each W-2 employee for the 2020 and 2021 tax filing years. And this money can be claimed from the IRS for up to three years. Businesses can get expert help from Disaster Loan Advisors (DLA) to ensure they receive the full amount available from the ERC loan program by submitting the revised 941-X application process.
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For more information about Disaster Loan Advisors™ (DLA), contact the company here:
Disaster Loan Advisors (DLA)
Lisa Stein
877-463-9777 ext. 3
lisa.stein@disasterloanadvisors.com
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