Apr 26, 2021
The application deadline for loans under the Paycheck Protection Program (PPP) changed from March 31, 2021 to May 31, 2021 when the President signed the extension into law. Small businesses have an additional 60 days to apply for a PPP loan as well as an additional 30 days for the SBA to finish processing applications received by May 31, 2021. It’s a great opportunity for business owners who still need financial assistance as a result of COVID restrictions. Our partner, Heartland, can make the application process seamless for your clients.
Second, and most importantly, very few small business owners are aware of the Employee Retention Tax Credit (ERC). The ERC is a refundable payroll tax credit that is available for businesses who experienced a decline in gross receipts or were fully or partially suspended by government order. The American Rescue Plan gave businesses until Dec. 31, 2021 to claim the credit — an addition of six months from the deadline established in December 2020.
Formerly, companies couldn’t claim this credit if they received a PPP loan. The Consolidated Appropriations Act permits organizations that receive PPP loans to claim the ERC if they meet the other ERC eligibility criteria.
The tax credit has been increased from 50% to 70% of qualifying wages for each employee up to a maximum of $7,000 per employee/per quarter or $28,000 per year! This credit takes into account each employee’s gross wages. It also includes the employer portion of any medical costs the business is paying as well.
Our partner, Heartland, assigns a dedicated specialist to every client to make sure they have the proper memo codes and tracking for the Employee Retention credit. If companies are not sure how to account for this credit in Q1 of this year, Heartland has a resource to amend their return.
Heartland would need the proper information, so if you have any clients who could benefit from an additional $7,000 tax credit per qualified employee/per quarter, please fill out the form.
Thank you for your continued partnership!
