by Peter Roos
Most businesses suffered substantial economic losses during the pandemic. Government at all levels pitched in to help. The most help came from the Small Business Administration (SBA) in the form of loans, which were distributed through banks. Many business owners are still desperate for cash to cover rising costs for everything. While the SBA ‘PPP’ money is gone, help is available through a less known program called Employee Retention Tax Credits (“ERTC”). The ERTC is a part of the Cares Act legislation that made credits available to eligible businesses whose business took a hit, based on wages paid to their employees.
Jake Welsh, owner of Payroll Vault – St. Petersburg helps small companies with their payroll and has been finding many businesses that qualify don’t even know about the opportunity to get credits based on their payroll. They have to be applied for and will expire in 2023, so procrastinators will lose out.
After a long career in the financial services industry as an accountant, commercial lender, consultant, and debt investor, Jake decided in mid-2021 to start a payroll services company in the St. Petersburg and nearby barrier island communities to leverage his experience in working with small businesses. Payroll Vault is a boutique style full-service payroll provider founded in 2012 with over 70 offices around the U.S. Each Payroll Vault is locally owned and focused on their local clients and communities but with national support and expertise allowing each office to provide tailored payroll and workforce management solutions. Primary services include payroll processing with all that entails, including check and W-2 processing, tax filings, direct deposit, pay cards, and much more. Payroll Vault’s service offerings are designed for the small business they focus on. It is those kinds of clients that qualify for the ERTC.
These credits will be available for up to three years from the date a business was eligible. For example, if a business qualified for a credit in the third quarter of 2020, they would be able to apply for the credit through the 2023 tax year. Payroll Vault – St. Petersburg is happy to do a FREE assessment for eligibility.
ERTC Eligibility Requirements
2020 ELIGIBILITY
Businesses that had 1-100 W2 employees in 2019 with a 50% decrease in gross revenue compared to the same quarter in 2019 or businesses that had a partial or total business closure due to federal, state or local order. The credit available for 2020 is 50% of wages up to $10,000/employee for a maximum credit of $5,000/employee for the year.
2021 ELIGIBILITY
Businesses that had less than 500 employees in 2019. Businesses that had a partial or total business closure due to federal, state or local order, OR a more than 20% reduction in gross revenue compared to the same quarter in 2019.
For 2021, the maximum credit is 70% of wages up to $10,000 for a maximum credit of $7,000/employee/quarter for the first three quarters of 2021 – so a total maximum credit of $21,000 / employee earning $30,000 in 2021.
Recovery Startup Business Eligibility
Businesses which started after 2/15/2020 with annual revenues less than $1,000,000 qualify for credits even if they are ineligible under the government ordered shutdown or revenue reduction eligibility requirements.
The maximum credit is 70% of wages up to $10,000 for a maximum credit of $7,000 per employee/quarter, capped at $50,000/quarter for a Recovery Startup Business. Q3 and Q4 2021 are eligible.
If you are interested in a local payroll agent who cares about your business, Payroll Vault – St. Petersburg is ready to help with your payroll and Employee Retention Tax Credit needs. Visit www.payrollvault.com/184Email Jake Welsh at jake.welsh@payrollvault.com or call 727-424-4044 today!