As the COVID-19 pandemic continues to impact businesses, the Employee Retention Tax Credit (ERTC) remains a valuable tool for keeping employees on the payroll. However, as with any tax credit, there have been updates and changes to the ERTC that businesses need to stay informed about. In this blog, we will discuss the latest ERTC updates and their future implications.
One significant update is the extension of the ERTC through the end of 2021. This means that businesses can continue to claim the credit for qualified wages paid through December 31, 2021. Additionally, the maximum credit amount has been increased from $5,000 to $7,000 per employee per quarter.
Another update is the expansion of eligibility for the ERTC. Previously, businesses that received Paycheck Protection Program (PPP) loans were not eligible for the credit. However, the Consolidated Appropriations Act of 2021 has now made it possible for businesses to claim the ERTC in addition to the PPP loan, as long as the same wages are not used for both programs.
Looking to the future, there are potential implications for the ERTC. One possibility is that the credit may be extended beyond 2021, depending on the economic conditions and the ongoing impact of the pandemic. There is also the potential for changes to the eligibility requirements and credit amount.
To stay informed on ERTC updates and future implications, it is recommended that businesses regularly check for updates from the IRS and consult with a tax professional. They can help businesses understand the latest developments and ensure that they are taking full advantage of the ERTC.
In conclusion, the ERTC continues to be a valuable tax credit for businesses during the pandemic. By staying informed on the latest updates and future implications, businesses can maximize their benefits and navigate these challenging times.