2021 Employee Retention Credit Offers New Tax Refund Opportunity
The COVID-19 Relief Bill (Consolidated Appropriations Act, 2021) signed into law in late December 2020 provides an immediate tax savings opportunity for many Pennsylvania businesses and nonprofit organizations. Many are unaware of the credit’s expanded scope and more generous credit amounts.
New for 2021, taxpayers can apply for a credit against expected payroll taxes for the first and second quarter of the year. The result is an immediate opportunity for those who qualify.
What is the Employee Retention Credit (ERC)?
The Employee Retention Credit is a refundable payroll tax credit available to businesses and nonprofits. When launched as part of the CARES Act, it provided a $5,000 per employee, per year credit for those with less than 100 employees experiencing either a forced shutdown or 50% reduction in gross receipts. Unfortunately, Paycheck Protection Program (PPP) recipients could not participate.
What Changed in 2021?
The COVID-19 relief legislation has not only extended the ERC but has made several changes to expand eligibility, increase savings, and even added a retroactive provision for PPP loan recipients. The ERC has been extended through June 30, 2021, increasing the per employee maximum, per year to $14,000 and expanded eligibility to include those with only a 20% reduction in gross receipts. Finally, small businesses can also receive a credit advance against future payroll taxes.
We Help You Qualify for the Employee Retention Credit (ERC)
Unlike other tax credits it is not necessary to wait until the end to save. The time to act is NOW!
Our CPA firm is one of the few firms in Pittsburgh that can help businesses receive this credit. We are ready to review your business, determine eligibility, and the amount of potential savings. We will make the necessary calculations, compile required documentation, prepare all filings, and submit to the IRS. Since you can claim the credit at any time, there is no reason to wait to get started.
If you have questions or would like to get the analysis started, contact us and we'd be happy to walk you through the details.
Basu Pancholi LLC Certified Public Accountants is a locally owned and managed accounting, tax preparation, payroll, and business consulting firm located in the South Hills area of Pittsburgh, PA.
We know the ins and outs of the accounting side of your business. As the bridge between you and your success, we help small business owners maximize their wealth and minimize their taxes.