As a small business owner, you are likely aware of the significant challenges that come with running a company during these unprecedented times. The COVID-19 pandemic has forced businesses across the world to shutter their doors and reconsider their operations. With many businesses struggling to stay afloat, it’s crucial to take advantage of all available aid programs, such as the Small Business Retention Credit (SBRC).
What is the Small Business Retention Credit?
The Small Business Retention Credit is a tax credit designed to incentivize employers to keep their employees on the payroll during the COVID-19 pandemic. The credit is available to businesses that have experienced a significant decline in revenue or were ordered to shut down during the pandemic. The credit is worth up to $5,000 per employee but can only be claimed once.
Who is eligible for the Small Business Retention Credit?
To be eligible for the Small Business Retention Credit, the business must either have experienced a decline in gross receipts of at least 50% compared to the same quarter of the prior year or been fully or partially shut down by a government order. Additionally, eligible employers must continue to pay their employees’ wages during the eligible period.
How to Claim the Small Business Retention Credit?
To claim the Small Business Retention Credit, eligible employers must file Form 941, the Employer’s Quarterly Federal Tax Return. The credit is claimed on line 13b of the form. Employers can also request an advance payment of the credit by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19.
Tips for Claiming the Small Business Retention Credit
1. Keep Detailed Records: To claim the credit, employers must keep accurate records of their revenue and qualified wages.
2. Consult with a Tax Professional: The Small Business Retention Credit can be complex, so it’s essential to consult with a tax professional to ensure you’re taking full advantage of the credit.
3. Don’t Delay: The Small Business Retention Credit is set to expire at the end of 2021. If you’re eligible, don’t delay in claiming the credit.
Conclusion
The Small Business Retention Credit is a valuable aid program designed to help small businesses during the COVID-19 pandemic. If you’re eligible, be sure to take advantage of the credit by keeping accurate records, consulting with a tax professional, and filing your claim in a timely manner. With the right approach, you can benefit from the Small Business Retention Credit and continue to support your employees during these challenging times.
