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If you have a small- to medium-sized business and haven’t applied for an Employee Retention Credit (ERC), you could be missing out on money that Congress reserved to put back into your business. While finding pens that wander away from the front desk can wait, we recommend applying for the ERC today.
Below, we’ll discuss the three reasons you should start your small business tax refund application immediately.
#1. Your Business Could Benefit Immensely from the ERC
The Employee Retention Tax Credit was an initiative to encourage businesses to keep employees on their payroll during COVID-19. Thousands of businesses qualify for the ERC, but many are still missing out. If you kept employees on your payroll despite economic hardship or temporary business closure, you could be entitled to money from the ERC. And let’s face it, who doesn’t need the extra cash right now?
It’s no secret that businesses are still hurting from the aftermath of the pandemic, so any government aid available should be used to keep these businesses — including yours — not just alive but thriving.
If your business meets the qualifications (and many do), you can get your refund and use it in whatever way is needed most. This could be anything from hiring more staff, training your existing employees, or improving your product or service to keep your business ahead of the competition.
The ERC is not a loan, it’s money you can put back into your business. This is cash specifically meant to go toward your business expenses.
#2. ERC Restrictions and Payouts May Tighten at Any Time
Currently, the ERC offers up to $21,000 per employee kept on the payroll for 2021, $7,000 each quarter from Q1-Q3 2021, and an additional maximum amount of $5,000 per employee kept on the payroll for 2020. This is potentially hundreds of thousands of dollars that can be refunded to your business.
Judging from the numerous guidelines and policy updates that have already been applied, the ERC rules can change at any moment. Since the ERC has not been extended to cover payroll for 2022, there may not be any additional cash added to the funds that are already in place.
Additionally, as the funds run out, there may be a decrease in the refund amounts available. As more businesses become aware of the ERC, your chances of applying in time to get the full amount decrease.
#3. Check the availability of the company you choose
As awareness increases, the availability of refund specialists will fill up. With an ERC company, you can avoid finding yourself with a returned or denied application because of a multitude of errors due to a lack of experience in the field.
If you begin the process of claiming your Employee Retention Credit with the help of an ERC company, your business will receive a though evaluation regarding eligibility. You can also read up on reviews and ratings to make sure you pick the right professional for the job and avoid hiring mistakes that could cost you.
Claim the ERC with Innovation Refunds
At IR, we know how important it is for small businesses to grow during these tough times, so we take your ERC seriously. Our network of tax professionals are ready to help you every step of the way so you can focus on growing your business.