MAC is Looking for a Few Good People Like You!!
It is no secret we are all doing more with less. We are working harder than we have worked in recent years, and we seem to always be behind! I know I am and I am sure you all are feeling the same pressures.
Employee Retention Tax Credits (ERC) are Still Available!
For many small businesses, the Employee Retention Tax Credit (ERTC) will provide significant financial relief. Between the pandemic closing businesses and offices to the constant inflation forcing people to reduce discretionary spending, drycleaners have been one of the hardest hit industries in the past few years. As an industry we need to be aware and utilize all the tools and programs available to us to continue to re-build.
The ERTC, passed under the CARES Act, is a refundable tax credit that rewards businesses who kept employees on their payroll during the COVID-19 pandemic shutdown. Many businesses do not think they qualify, but the rules have changed and now there are multiple ways to get the money you are owed.
The good news is many businesses have already claimed and received ERTC for both 2020 & 2021. The bad news is the majority of small businesses have not filed for the program or have not taken full advantage of all they are able to. The truth of the matter is the program is new and has been evolving and changing constantly. The more you look into the program the more nuances you notice that can have a direct impact on the applicability for drycleaners. At the outset, we were only looking at the revenue reduction criteria, but as we dive further into the program, we have found other “triggers” that can be used to enter the program. As an industry, here are the top criteria Drycleaners can use to qualify for ERTC Relief:
What can this mean for my business?
The financial package can be significant. If you fully qualify for each quarter, you can receive up to $26,000 FOR EACH W-2 employee. The amount will vary depending on what time period you qualify for and how your company was affected by covid restrictions.
From everything I have seen, 80% of all small businesses probably qualify for the program but I believe for a variety of reasons they have not taken full advantage. I think most of the larger companies have already filed for this and received the checks/refunds, but I know there are a lot of people that are not filing thinking they do not qualify. I also firmly believe some of the early filers may not have taken full advantage of all they are entitled to.
There have been some significant changes in the program since its inception. One of the most significant changes eliminated the PPP restriction. Now even if you did use the PPP, you can still file and take advantage of the ERTC. In the beginning, there was only a revenue reduction criteria, and since then there have been a number of added criteria that could help many more businesses. If you qualify for one quarter of ERTC in 2021, it will also automatically qualify for the following quarter as well.
Why haven’t I heard this, or think it doesn’t apply to me?
CPA's do not typically deal with quarterly returns or weekly payroll. QuickBooks, ADP and Paychex require business owners to manually apply for this credit on their own. It is an involved process and takes time to make sure you qualify – but the return on your investment can be huge. I strongly urge everyone take a look at their situation and thoroughly investigate applicability. You don’t want to leave this kind of money on the table.
I have been researching companies that will do this for you on a contingency basis. Generally, for 15% of whatever refunds and tax credits you receive the company will review your payroll records, establish applicability, and work with you to take full advantage of the program.
If you have not filed yet, or if you filed, but think you may be entitled to even more credits based on some of the new criteria – let me know. I can put you in touch with a company that may be able to file for significant tax relief. If you need advice or help, contact me at 617-791-0128 or firstname.lastname@example.org.
Your membership at work!
For more information on any of these service or programs contact Peter Blake (603-635-0322 or email@example.com