LEGALLY SPEAKING CREATIVE COUNSEL Don’t Miss Out On the Employee Retention Tax Credit Putting MRA’s Marketing to Work for Your Business

THOMAS CLEMENT MRA Vice President, Operations and General Counsel

As we welcome Spring with open arms, we also approach the end of another tax season. While most of us are content with paying our fair share, we also want to minimize our tax obligation as much as possible. One potential avenue receiving a lot of attention lately is the COVID-19 era Employee Retention Tax Credit (ERTC), enacted by Congress in March 2020.

The ERTC provides a tax credit for qualifying employers who kept employees on their payrolls during the economic downturn caused by COVID-19. A qualifying business is broadly defined as any employer operating a trade, business, or tax-exempt organization.

To be eligible, employers must have been ordered to fully or partially shut down due to government order or had gross receipts decline by 50% in 2020 or 20% in 2021 in a single quarter, as compared to that same quarter in 2019. Qualifying and eligible employers can claim a refundable credit against social security tax on up to 70% of qualified wages paid out to employees. The credit is limited, however, to $5,000 per employee, per quarter in 2020 and $7,000 per employee, per quarter in 2021. Additionally, wages reported as payroll costs for PPP loan forgiveness and other tax credits cannot be used for ERTC purposes.

If you feel like you may have missed out on the ERTC, fear not. The credit may be claimed up to three years after the original payroll taxes were due. To determine your eligibility, the best approach is to discuss the issue with your tax preparer. Alternatively, there are a number of online companies that market this service for a fee. If using an online service, you will always want to exercise due diligence to make sure the provider is reputable.

ANDREA BITELY MRA Vice President, Communications and Marketing

As a member of Michigan Retailers Association, we’re here to help you grow your business.

What does that mean? Well it’s simple: Have a question? We can help. Through our Ask Us First program, we are happy to help you with everything from the initial steps of setting up a business in Michigan, to maintaining good business practices.

Ask Us First is way more than that. It’s a resource to help you help your business reach its full potential. Over the last few years, we’ve provided advice on a variety of business questions and concerns. But, we have far more knowledge to share.

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When it comes to growing your business, we know there can be growing pains. Your annual dues are an investment in your future, and we’re here to help you grow, change, and connect with your past, current, and future customers like never before.

Email askusfirst@retailers.com or call 800.366.3699 to get started.