Let’s face it, it’s been a dark year and a half since much of the country shut down with the coronavirus pandemic. Now, many businesses that believed they had made it through the worst of it are facing pandemic aftershocks that are shaking up business models around the globe. The early pandemic panic has been replaced with lingering shutdown shortages.
At the moment, many businesses that rely on finished products are suffering. Product work in progress has halted as companies are missing integral parts required to push their products to the finish line and into the market. Product shortages are obvious with a drive past your local car lot.
Restaurants that survived Covid are so desperate for workers they now have a drive thru for interviews. The shortage of employees has pushed the state governments to make decisions to cut federal unemployment aid. On the flip side, businesses that made it through the pandemic without laying off a single employee are now facing their worst fears. Business owners are wondering how long they can keep from laying off employees when they are missing key products to sell.
Now for some much-needed good news. Although the second draw of the Paycheck Protection Program (PPP) loan deadline has passed, the newly extended Employee Retention Credit can come to the rescue for many businesses if the business has a savvy accountant to verify the qualification and credit amount for the current quarter. The credit that will be claimed at the end of the quarter can be used to offset federal payroll liabilities during the quarter that would reduce available cash. At the end of the quarter, any unused credit can be applied to the next quarter or refunded for a much-needed injection of funding to the business bank account. There is even a form to complete and fax for an advance payment of the credit for businesses to use to meet other obligations.
So, how much potential payout does this credit have? In 2021 the potential credit is up to $7,000 per employee per quarter for the entire year. This money could make big differences for small businesses experiencing the continued effects of Covid fallout. To learn more about the credit and whether your business qualifies, contact us for a free consultation.