5 Ways the Small Business ERC Can Help Your Business Survive the Pandemic

5 Ways the Small Business ERC Can Help Your Business Survive the Pandemic

Small businesses have been hit particularly hard by the pandemic, with many struggling to survive the economic downturn. The good news is that there are resources available to support small business owners, including the Employee Retention Credit (ERC). The ERC can provide a lifeline to businesses struggling to stay afloat during these uncertain times. In this article, we’ll discuss 5 ways the Small Business ERC can help your business survive the pandemic.

1. Cash Infusion

One of the most significant benefits of the ERC is that it provides a cash infusion to small businesses. This credit is refundable, meaning that if your business qualifies, you could get a check for the amount of the credit, even if you have no tax liability. This cash can be used to pay for essential expenses such as rent, payroll, and utilities.

2. Reduced Payroll Tax Liability

The ERC provides eligible employers with a credit against payroll taxes, reducing their tax liability. This credit is equal to 50% of eligible wages paid to employees, up to a maximum of $10,000 per employee per quarter. This reduction in payroll taxes can free up much-needed cash flow for small businesses struggling to pay their bills.

3. Eligibility Flexibility

The ERC was expanded in the Consolidated Appropriations Act of 2021 to make it more accessible to small businesses. Eligibility is now determined on a quarter-by-quarter basis, meaning that businesses that had a significant decline in gross receipts in one quarter in 2020 or 2021 may be eligible for the credit. Additionally, businesses that were not in existence for the entire year of 2019 may still be eligible for the credit.

4. Retroactive Refund

The ERC is retroactive to March 12, 2020, meaning that eligible businesses could take advantage of the credit for entire quarters that have already passed. This retroactive refund can provide a much-needed financial boost to businesses struggling to stay afloat.

5. Additional Funding Available

In addition to the ERC, there are other funding resources available to small businesses. The Consolidated Appropriations Act of 2021 included $284 billion in funding for the Paycheck Protection Program (PPP), which provides forgivable loans to small businesses. This funding can help businesses as they navigate the challenges of the pandemic.

In conclusion, small businesses are facing unprecedented challenges due to the pandemic. However, the Small Business ERC can provide a lifeline to businesses struggling to stay afloat. The ERC provides eligible businesses with a cash infusion, a reduction in payroll tax liability, flexibility in eligibility requirements, retroactive refunds, and additional funding resources. By taking advantage of the ERC, small businesses can increase their chances of surviving the pandemic and thriving in the future.

Speech tips:

Please note that any statements involving politics will not be approved.