Small Business Tax Credits for Employee Retention Still Available
June 9, 2022
by Maria S. Salinas
The pandemic created immense uncertainty in labor markets, and now, retaining employees is a real challenge, especially for small businesses. In an effort to help our local and small businesses, the Employee Retention Tax Credit (ERTC) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This provides a credit to small and medium businesses (including tax-exempt charities) for qualified salaries and health benefit expenses incurred during the pandemic.
The ERTC is an important tax credit providing economic relief, allowing small businesses to stabilize and return to a path for growth.
The IRS forecasted that 70%-80% of small and medium businesses were eligible for the tax credit, but so far, the number of businesses which have applied is far below expectations. In the Los Angeles region, where small businesses dominate the business landscape, especially those owned by women and persons of color, these tax credits can make a real difference in their economic recovery.
There is still time to apply for the tax credit for eligible businesses to receive as much as $26,000 for each W2 employee in 2020 – 2021. If you need to determine if your small business qualifies for the tax credit, click here to get assistance through Chamber member EY.
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