Tax Savings Tips: August 2022
Claim Your 2020 and 2021 ERC Now (Yes, in 2022) During much of 2020 and 2021, you may have qualified for the Employee Retention Credit (ERC). Lawmakers created this tax credit in response to the COVID-19 pandemic. With the ERC, you found (or could find) tax credits of up to $26,000 per employee. That’s a lot. With 10 employees, that’s $260,000. Key point. If you have not claimed the ERC, you can amend your 2020 and 2021 payroll tax returns for the credit. (Amending the payroll is not difficult—so no sweat on that score.) Three Ways to Qualify 1. Decline in gross receipts (on a quarterly basis, by more than 50 percent in 2020 compared with 2019, and by more than 20 percent in 2021 compared with 2019) 2. A COVID-19 government order that caused a full or partial shutdown (think physical space) 3. A COVID-19 government order that caused more than a nominal effect (think modification of activity) Two Types of ERC Qualifications: R