EMPLOYEE RETENTION TAX CREDIT (ERTC)
The Employee Retention Tax Credit is a refundable tax credit designed to encourage employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an employer whose business is fully or partially suspended because of COVID-19 or whose gross receipts decline by more than 50%. Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. If the employer's employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS.
Families first coronavirus response act (FFCRA)
The Families First Coronavirus Response Act (FFCRA) provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. The FFCRA gives business with fewer than 500 employees funds to provide employees with paid sick and family and medical leave for reasons related to COVID-19, either for the employee's own health needs or to care for family members. Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional ten weeks of paid family leave to care for a child whose school or place of care is closed due to COVID-19 precautions. The FFCRA covers the costs of this paid leave by providing small businesses with refundable tax credits.
STATE TAX INCENTIVES
Many States "piggy-back" some of the Federal tax incentives, which can help offset your State income taxes. These programs vary from State to State, but are designed to help create new jobs and economic growth. MJA & Associates can help identify and administer these tax programs. Contact us to find out if your State offers any tax incentives.