Strategic ERTC Planning: How Businesses Can Incorporate Employee Retention Credits Into Financial Planning

A financial boost can help your business meet its strategic goals. The Employee Retention Tax Credit (ERTC) has helped many companies meet their short-term needs and make long-term plans. Strategic planning is vital for aligning business objectives with ERTC funds. Qualified businesses can enjoy the refundable tax credit to meet their organizational goals.

 

Employee Retention Tax Credit (ERTC)  

The ERTC is a provision enacted during the COVID-19 pandemic to help businesses maintain their employees on payroll. The fully refundable credit was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
 

The credit covers 50% of qualified wages paid between March 12, 2020, and January 1, 2021, which includes qualifying health plan expenses. Employers can claim 2020 ERTC until April 15, 2024, and 2021 credit until April 15, 2025.

 

Determining ERTC Eligibility

Knowing whether your business qualifies is the first step in claiming the ERTC refund and moving forward. The exact details of the requirements and regulations can be complex. However, it revolves around Substantial Revenue Decline and Business Operation Suspension. You must show your business experienced a significant reduction in receipts in the stated period. Your company must have experienced a partial or complete shutdown due to the pandemic.

 

Benefits of Strategic ERTC Planning

ERTC strategic planning has several benefits for your business. Planning and getting professional advice can help to:

·         Determine your credit eligibility and avoid processing delays and penalties

·         Maximize the tax credit amount available to your business

·         Improve your cash flow, enabling you to stay afloat in the long term

·         Enable you to retain your employees and avoid layoffs. It will help to boost morale and improve team productivity.

ERTC and Financial Planning

The ERTC provides an avenue for businesses to keep their staff and operate. The payment helps to ease liquidity concerns the company may have. Credit can help to manage your cash flow and mitigate financial challenges.
 

Understanding and following the statute of limitations is essential for proper financial planning. It is typically three years from the tax return for the year the credit is claimed. Filing within the statute of limitations will help to avoid interest charges or penalties.

 

Why You Need Professional Help

Working with an experienced law firm can ensure you receive the best advice.

They ensure that:

·         You follow all the tax regulations

·         File proper claim documentation

·         Understand changing government requirements

Professional help will allow your business to file on time, follow regulations, and avoid red flags. You can avoid claim denials arising from issues with your application. It allows you to make the most of the credit.
 

Used alongside other programs, ERTC can provide relief for businesses. The IRS developed the plan to allow eligible firms to receive an advance on their credit. All employees are eligible if a business has less than 100 employees. The goal of the relief provision was to encourage small businesses to continue operating by avoiding employee layoffs.

For more on incorporating employee retention credits, visit Coomber Law, APC. Our office is in Carlsbad, California. Call (760) 205-3810 to book an appointment today.