Unlock the Secrets to Maximizing Employee Retention Tax Credits and Boost Your Bottom Line

As a business owner or manager, you’re looking for every advantage you can get, but where will those advantages come from? How can you enhance your bottom line and unlock the potential that comes from employee retention tax credits, tax deductions, and other cost-saving steps? 

Read further to understand what the employee retention tax credit is, how to claim this credit, and how your business can thrive in the future with this knowledge in hand. Can loss reduction alter the trajectory of your company?

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What is the Employee Retention Tax Credit?

In short: ERC is a stimulus program designed to help those businesses that were able to retain their employees during the Covid-19 pandemic. 

The employee retention tax credit, according to the Department of the Treasury, is a refundable tax credit that encourages business owners such as yourself to “keep employees on the payroll”.

Generally, you qualify for this credit if:

  • Your business was fully or partially shut down by COVID-19
  • And your gross receipts dipped below 50% of the same quarter in 2019

When you want to calculate the credit and determine how much you can claim on your year-end return, you can work with a firm like Bottom Line Savings, who will do the math for you. Cost reduction consulting is a wise investment, especially when you’re dealing with complex tax questions.

Remember, your business ebbs and flows just like the economy, and you may not qualify for the credit in every quarter you operated this past year. Again, this is why working with a professional consultant helps. 

How to Obtain Employee Retention Tax Credits

When you want to obtain the ERC, you should work with a financial professional who will help you understand if you qualify. Next, a cost reduction consulting firm like Bottom Line Savings will help you:

Calculate the credit

You could receive:

  • Thousands of dollars in credits for each employee on the payroll
  • Recover credits from each financial quarter based on who remained on the payroll

Determine how many quarters in which you qualified

You can only claim the credit in the financial quarters where you met the qualifications—meaning your eligibility can change from one period to the next. Don’t assume you’re getting the credit for the whole year.

Reduce your taxable income by the amount of the credit

As your taxable income drops, you pay less to the IRS (or receive a refund, depending on your situation.)

How Do Employee Retention Tax Credits Improve Your Bottom Line?

Essentially, the employee retention tax credit helps you save money on your year-end tax return. Remember, there are numerous credits and deductions available to your business, but you may not be aware of all the options available to you. 

No, you aren’t putting cash back in your pocket, but you are lightening the load when filing your tax return. If your business can reduce its tax liability, you might owe less, pay nothing or receive a refund for the previous tax year. 

Why Hire a Cost Reduction Consulting Firm?

Hiring a cost reduction consulting firm like Bottom Line Savings means that you get the benefit of their expertise, especially where the Employee Retention Credit is concerned. You can’t simply do what you did last year, and you can avoid an audit with the help of an expert. Moreover, you can look at other methods of cutting costs, enhancing your bottom line and helping your business thrive—even in uncertain economic conditions. 


Posted In: Small Business