The Employee Retention Credit was created to help businesses recover from COVID and to promote them keeping their employees paid. Although the program itself ended in 2021, the credit can still be filed for through a tax amendment today. This means that those who qualified for the credit can save thousands of dollars for something done years ago.
In terms of the criteria needed to qualify, businesses may qualify by meeting four conditions. First, did the business lose revenue due to COVID-19? This means a significant decline in 2020 or a general decline of revenue in 2021. Second, was the business partially or completely suspended by the government? This can be in hours lost, supply chain limitations, or a limited workforce. And third, was the business qualified as a Recovery Startup Business.
On top of these three criteria, the business must also be U.S operated and must have qualified wages. Meeting these criteria means a business may be able to refile and claim the retention credit. Claiming the credit can mean upwards of $5,000 saved per employee for small businesses. And even for larger businesses, there’s a significant amount of money to be saved if employees were taken care of well. Ultimately, for many the credit is just free money waiting to be taken advantage of. The more businesses that take advantage of it, the better.
