Employer Tax Credits are Now More Available and Larger

Employer tax credits are more available this year and could result in tens of thousands of dollars in tax savings.

Employee Retention Credit

The Employee Retention Credit (ERC) is worth up to $7,000 per employee per quarter this year (total of $28,000 per employee). The credit is worth up to $5,000 per employee in 2020. Generally, Form 941 must be amended to claim a payroll tax credit and refund. Click the link below for summaries to learn more.

This year a “Recovery Startup Business” can be eligible for the ERC in the third and fourth quarters without being shut down or having a drop in revenues. A Recovery Startup Business is a business that started after February 15, 2020 and has average annual revenues of less than $1 million.

We would be happy to assist you in calculating the employee retention credit and completing the amended tax returns to claim the credit. Alternatively, we can refer you to an independent consulting company that specializes in calculating these tax credits for a fee of usually 15% of the expected tax credit, but they generally will not prepare the amended tax returns.

Note that the bipartisan infrastructure bill, as currently written, would repeal the ERC effective September 30, 2021 instead of December 31, 2021.

Family Leave Tax Credit

Wages paid to by an eligible employer to employees who help persons get vaccinations or help them recover from vaccinations may qualify for the family leave tax credit for such leave taken April 1, 2021 to September 30, 2021.