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Tax credit programs still available for small businesses hit by COVID

On Behalf of | Jul 25, 2023 | Firm News

COVID-related benefits are still ongoing for small businesses. Those who employed 1-499 employees during 2020 and/or 2021 may qualify for an Employee Retention Tax Credit (“ERTC”) of up to $28,000 per W2 employee. This is not a tax offset for future taxes. It is money paid to the business through refund checks — a check for each eligible quarter, usually paid 4-6 months after the company files the refund documents.

Due to four retroactive changes in the ERTC law made by Congress, many small businesses that previously did not qualify for the refund or who only qualified for part of 2020 and/or 2021 may now qualify for all eligible quarters of 2020 and 2021.

If you are a business that employed between 1-499 employees during 2020 and/or 2021, you owe it to yourself and your business to contact Cox Legal for a free consultation on whether your business qualifies for this expanded refund program – even if you were previously informed that you do not. For example, receiving a Paycheck Protection Program (PPP) loan does not disqualify you from claiming the ERTC.

To qualify for the refund, a business must demonstrate:

  • Total or partial shutdown due to government mandates
  • A significant decline in gross receipts compared to pre-pandemic times

Sick and family leave tax credit

In addition, many businesses did not know of or claim tens of thousands of dollars more in available refunds for certain wages paid to employees from April 1, 2020 – September 30, 2021. Under the Sick and Family Leave Tax Credit (“SFLTC”), employers may be entitled to up to $15,110 per employee you paid while they were off work themselves for COVID-related reasons and/or who were off work to care for children and potentially others who were affected by COVID. You may even qualify for the SFLTC as an independent contractor!

The new deadlines

The ERTC filing deadline for 2020 is April 15, 2024, and the deadline for 2021 is April 15, 2025. The laws have changed, and for once, they have changed in favor of small businesses! Even better, Cox Legal only needs a handful of readily available documents and a brief discussion to estimate your refund – potentially in the hundreds of thousands of dollars or more.

A win for business

Employers who take advantage of this opportunity will significantly enhance the viability of their business by alleviating financial strains felt by many workers and enable employers to retain valued employees better. We should also add that the IRS is warning against scammers offering to help with ERTC filings – Cox Legal can put all those fears to rest.