Up to $26K for Each of Your W2 Employees. Does Your Business Qualify?
April 18, 2022 | Bank Iowa
Among the federal CARES Act initiatives is the Employee Retention Credit (ERC). As one of the largest tax credits for organizations in recent history, the relief program is generating a lot of buzz – and its fair share of confusion. Read on to learn more about whether your business may qualify.
Why was the Employee Retention Credit instituted?
The ERC was established as an incentive for businesses to keep employees on payroll during the pandemic, similar to the Paycheck Protection Program (PPP).
How is the refund calculated?
Organizations may be eligible for up to $5,000 per quarter per employee for 2020 with a maximum of three quarters, and up to $7,000 per employee per quarter for 2021, also with a maximum of three quarters.
Can an organization receive both PPP and ERC funds?
Prior to 2021, companies were not able to claim both PPP and ERC. However, due to a recent regulation change, that is no longer the case.
How does ERC differ from PPP?
PPP loans were considered forgivable. ERC returns payroll taxes that have already been paid to organizations that qualify.
What is the timeline to receive these funds?
How long the funds remain available is unknown. Other government fund programs have had their funds depleted without notice in the past making it important to investigate your eligibility as quickly as possible.
Does my business qualify?
There are two different ways to qualify. In 2020 and/or 2021 your business must have experienced either limitations of commerce, travel or group meetings, or a significant decline in revenue.
How do I apply for an ERC?
You can apply here.
Bank Iowa has partnered with Innovation Refunds, a company created to assist small- and medium-sized businesses attain cash incentives from federal and state governments.
There is no upfront cost to determine if your business qualifies or the dollar amount you will receive. Should you decide to proceed with an ERC refund, Innovations Refunds will share in a percentage of the refund you receive from the government.
With more than $1.8 billion in assets, Bank Iowa ranks as one of the leading independent ag banks and the second-largest family owned bank in the state. Farmers, families and businesses access Bank Iowa’s products and services through 26 locations in 23 communities, as well as online and on mobile devices. To learn more, visit bankiowa.bank. Member FDIC.