Gary Donis 
The Employee Retention Credit is a federal credit available to employers who have successfully retained their employees on payroll during the outbreak of COVID and government-imposed COVID restrictions. This credit program is proposed by the government under the CARES Act to encourage employers to retain their employees on the payroll when the whole world was suffering during the outbreak of COVID.
However, there are limits on the amount of credits that an employer can claim and certain requirements must be met in order to qualify for this credit. Click here to learn more about eligibility criteria for ERC or Employee Retention Claim.
We will now see into the major benefits of taking the employee retention credit.
- Significant reduction in payroll taxes
Payroll taxes constitute a significant part of yearly operating expenses for all businesses. Generally, all employers as well as their employees are subject to these payroll taxes at both the federal and state level. ERC or Employee Retention Credit can significantly reduce payroll taxes for employers. Employers will be able to deduct a percentage of their federal payroll taxes as a result of claiming the Employment Retention Credit.
- Extra liquidity to invest in businesses
A reduction in payroll taxes provides you with extra liquidity. You can invest in your business to improve your production processes, upgrade or acquire new machines or simply expand your business operations. In fact, the Employee Retention Credit can also be used to finance your business expansion. You can take money from ERC, reinvest them into the business and watch your profits grow!
- Can be claimed in addition to PPP
Your business can be eligible for both PPP and ERC at a time. In short, you can apply for ERC even if you have received PPP benefits. You can consult an ERC specialist to find out how to claim for ERC in addition to receiving PPP benefits. An ERC specialist can also assist you with PPP claims.
- Lower your company’s COVID liability
A reduction in payroll taxes will greatly reduce your company’s COVID liability. You can use ERC benefits to settle the liabilities grown during the outbreak of COVID because of the effect of government-imposed COVID restrictions on your business. With ERC benefits, your business can get fresh cash to invest in your business and grow!
