There have been few events that have posed as many challenges to businesses as COVID-19 and the pandemic. It wasn’t just a matter of not getting much business, the pandemic created extremely unique challenges. All of a sudden it was balancing a space that wasn’t being used, employees that couldn’t work, and products that weren’t being bought.
It was no surprise then that during this time costs had to be cut. Remote work was developed and exploded in a way never before seen. Employees were laid off at unheard of rates. Entire businesses found themselves underwater that were strong before the pandemic. For many businesses, there was little that could be done under the circumstances. Yet the government still attempted to provide aid.
Qualifying for the Employee Retention Credit
There were loans, the Paycheck Protection Program, and the focus of today the Employee Retention Credit. This credit was an incentive for businesses to keep their employees and to keep them paid. It was a program created and targeted for smaller businesses during the pandemic. The program officially ended in 2021, but businesses that qualified can still benefit from it today.
In terms of exactly who did and still qualify for the credit today, there are a few key factors. First, did the business suffer from COVID. Second, did the government forcibly suspect or shut down the business at any point. Third, was the business a Recovery Startup Business. And fourth, was it a select organization (university, startup, construction company).
Conclusion
After meeting just one of these criteria a business can earn this credit for the employees they kept on board. The credit applies differently depending on the business and amount of employees. After reaching a target number it will apply to wages made to non working employees instead of all employees. The number the credit offers then is up to a lot of variance. Ultimately though, it’s an incentive for something that has already happened. There’s no reason for businesses today not to take advantage if they apply. It’s a benefit for businesses that stayed strong during COVID. Not many small businesses are here today to tell that tale.
