Donna Fuscaldo | Senior Finance Writer – Business.com
The Employee Retention Credit can save small business owners thousands of dollars this year. Here’s how to take advantage of it.
Many small business owners don’t realize that they could be losing out on thousands of dollars by not taking advantage of a pandemic-related tax break. The Employee Retention Credit (ERC), passed as a part of the COVID-19 economic relief package in 2020 and extended in 2021, gives small business owners tax breaks for keeping employees on the payroll.
“The Employee Retention Credit is a huge game changer,” said Jay Woods, CEO of Omega Accounting Solutions. “It’s a massive credit that has been extended out for the entire year.”
Any business that has employees should be looking into this tax credit, Woods said.
“If you have 10 employees, your business can qualify for up to $70,000 per employee per quarter,” Woods told business.com. “If you’re not taking advantage of that and a competitor is, you might lose an advantage.”
Woods pointed to some examples of clients that have reaped significant benefits from the ERC. One business with 200 employees, for example, qualified for close to $5 million in wage credits, and another client with 140 employees got $600,000 in credits in the first quarter alone, he said.