The Employee Retention Tax Credit is a wide-ranged refundable tax credit made to encourage employers to help keep employees on their payroll. This credit is 50% of qualifying wages that can be paid up to a total of $10,000. To be eligible for the credit, an employer must have experienced a significant decline in gross receipts or been forced to suspend operations due to a governmental order related to COVID-19. The ERTC for this year is available for wage payments made from January 1, 2021 to June 30, 2021

If you had less than 100 employees on average in 2022, the credit will be based on wages paid to all employees regardless if they’ve worked or not.

If you had more than 100 employees on average in 2022, the credit will only be allowed for wages paid to employees who did not work during the calendar quarter

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According to the PATH Act, a qualified small business could elect to apply its Research & Development credit against only the 6.2% Social Security tax. Beginning with the 2023 tax year, eligible businesses will be allowed to apply up to an additional $250,000 against their 1.45% Medicare tax liability. This credit can be claimed for no more than five years.

To be eligible, the claim must meet this requirements:

Identify all the business products and processes that apply to the Section 41 research credit claim of this year.

For each business product and process, specify all research activities performed, all individuals who performed each research activity and all of the information each individual sought to discover.

Provide the total qualified employee wage expenses, total qualified supply expenses and total qualified contract research expenses for the claim year.

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The Work Opportunity Tax Credit is a federal tax credit that promotes hiring employees that are members of a target group. The credit is available to employers that hire and keep individuals from certain target groups that have been determined to have significant barriers to employment such as veterans, long-term unemployment and even criminal history. The credit amount for WOTC can be up to $9,600 for each qualified new hire, depending upon the new hires' WOTC target group. The credit is equal to a percentage of the eligible employee’s wages, and the employee must work at least 120 hours for the employer to receive credit.

Ask your tax preparer for more information about this program!