Employee Retention Tax Credit (ERTC) for Travel Advisors and Small Businesses
The Employee Retention Tax Credit (ERTC) is an important tool for travel advisors and other small businesses to help retain employees in the face of economic challenges. The program provides a tax credit for eligible American employers who had employees on the payroll between January 1, 2020 and June 30, 2021. For those working in the travel and hospitality industry, one of the sectors hit the hardest, understanding how ERTC works can be a valuable asset in navigating the current economic crisis. Here we provide an overview of ERTC and how it applies to small business owners and travel advisors. We’ll also cover some tips on how to claim the ERTC tax benefits under this program.
- All Small and Medium Sized Businesses Qualify
- What is the Employee Retention Tax Credit?
- When do I have to apply?
- How Does the Employee Retention Tax Credit Work?
- What are the Requirements for the Employee Retention Tax Credit?
- How Much is the Employee Retention Tax Credit Worth?
- How Do I Claim the Employee Retention Tax Credit?
What is the Employee Retention Tax Credit?
The Employee Retention Tax Credit (ERTC) is a refundable tax credit for employers in the United States of America that retain their employees during the COVID-19 pandemic. The credit equals 50% of the qualified wages paid by the employer to its employees, up to $5,000 per employee. Qualified wages include salary, hourly pay, commissions, and other forms of compensation. The ERTC is available for travel advisors and any small business with under 100 employees working March 13, 2020 and before January 1, 2021.
All Small and Medium Sized Businesses Qualify
Any business, in any field with under 100 employees qualifies. Adam Abernethy, ERTC Advocate for small and medium-sized businesses and author of The Book on E.R.T.C. said, “In my firm, we are seeing an average refund of $150,000. Some are well over 1 million. Many of those business owners weren’t sure they would qualify until they had an initial verification. We have an online tool, or we can answer any question by phone. It doesn’t matter if your business is a small hotel, a restaurant, a travel agency or even a service industry. All businesses can qualify.”
Start-up businesses that began operations after February 15, 2020 can take a credit of up to $50,000 in both the third and fourth quarters of 2021 for a maximum credit of $100,000.
By answering a few, simple, non-invasive questions, the team of ERTC experts can determine if you likely qualify for a no-strings-attached tax credit. There is no cost or obligation to be pre-qualified.
Calculate your ERTC tax credit: ertcverification.com
When do I have to apply?
The final deadline is April 15, 2024 for the Employee Retention Credit deadline for the 2020 tax year. However, it is best to apply now before funding is exhausted or discontinued for unforeseen reasons. Application is free, and there is no cost or obligation to be pre-qualified. Answer a few, simple questions and you get a reply from the team of ERTC experts.
How Does the Employee Retention Tax Credit Work?
ERTC is a refundable tax credit for eligible employers that helps offset the cost of retaining employees during the COVID-19 pandemic. The credit is available for qualified wages paid from March 13, 2020 through December 31, 2020.
To be eligible, employers must:
• Have been carrying on a trade or business during 2020 (in the United States)
• Experienced a full or partial suspension of operations due to a government order related to COVID-19
• Experienced a significant decline in gross receipts (generally, gross receipts must be less than 50% of what they were in the same quarter in 2019) during any quarter in 2020.
Eligible employers can claim the credit for qualified wages (including health insurance costs) paid to employees after March 12, 2020 and before January 1, 2021. The maximum credit is $5,000 per employee. The credit is available for both full-time and part-time employees.
Employers can claim the credit against payroll taxes (including the employer’s share of Social Security tax) or income taxes (including alternative minimum tax). If the employer’s payroll taxes are not sufficient to cover the cost of the credit, the employer may carry the unused portion of the credit forward to future quarters.
What are the Requirements for the Employee Retention Tax Credit?
In order to claim the employee retention tax credit (ERTC), businesses must have experienced a decrease in gross receipts of at least 50 percent when compared to the same quarter in the prior year. The credit is available for retaining employees and paying them 50 percent of their wages, up to $5,000 per employee.
The credit is available for Employers with less than 100 full-time employees including those who are part-time or seasonal. Eligible employers can receive a refundable payroll tax credit for 50% of qualified wages paid to eligible employees during the covered period.
To qualify, an employer’s business must have been fully or partially suspended by government order due to COVID-19 during any quarter in 2020. Or, the employer’s gross receipts must have declined by more than 50% when comparing any 2020 quarter to the same 2019 quarter.
How Much is the Employee Retention Tax Credit Worth?
The Employee Retention Tax Credit (ERTC) is worth up to $5,000 per employee. This tax credit is available to businesses that have experienced a decrease in gross receipts of at least 50% when compared to the same quarter in the prior year. To be eligible, businesses must also have less than 500 employees. The credit is applied against the employer’s share of Social Security taxes and is refundable.
How Do I Claim the Employee Retention Tax Credit?
If your travel agency has been affected by the COVID-19 pandemic, you may be eligible for the Employee Retention Tax Credit (ERTC). To claim the credit, you must file Form 941 for each quarter in which you pay qualified wages. The credit equals 50% of eligible wages paid to each employee,up to $5,000 per employee per year.
To be eligible for the ERTC, your travel agency must have experienced either a complete or partial shutdown due to COVID-19 related restrictions, or a significant decline in gross receipts. If your travel agency has not been affected by either of these conditions, you are not eligible for the ERTC.
If you have employees who are telecommuting or working remotely, you can still claim the ERTC for those employees as long as they are performing services for your travel agency. You cannot claim the ERTC for any employee who is on paid leave, including vacation or sick leave.
To claim the ERTC, you must file Form 941 for each quarter in which you pay qualified wages. You will need to include Schedule R with your Form 941 filing. If you have more than one location, you can choose to either claim the credit at each location or consolidate your locations into one credit.
Employee Retention Tax Credit (ERTC) can be a great way for travel advisors to save money on the cost of their staff. This credit allows employers to receive significant employee tax credits and make it easier for businesses to retain employees after facing difficult times like the pandemic. With ERTC available for 2020 and 2021, now is a great time for travel advisors to take advantage of this benefit and ensure that they can keep their staff happy and productive as we look toward brighter days ahead.
Apply and calculate your ERTC tax credit refund: ertcverification.com
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