The Employee Retention Tax Credit is a refundable tax credit that businesses can claim on wages paid to employees. The credit is used to offset both income and payroll taxes. To qualify for the credit, wages must be subject to FICA taxes, as well as qualified health expenses. This article will provide an overview of the ERTC while Benchmark Human Capital answers some common questions about repayment.
Do I Have to Pay Back the Employee Retention Tax Credit?
Do I Have to Pay Back the Employee Retention Tax Credit?
Eligibility for Employee Retention Tax Credit (ERTC)
To be eligible for the ERTC, your wages must be subject to FICA taxes. This includes both employee and employer contributions to Social Security and Medicare. However, health insurance premiums and other medical costs that are not covered by insurance plans may qualify. Learn if you qualify with the help of Benchmark Human Capital.
Claim Amount on Employee Retention Tax Credit (ERTC)
The maximum amount that can be claimed on the Employee Retention Credit is $2000 per employee, up to a total of $10000 per business. However, at Benchmark Human Capital, we recognize this amount may change if Congress passes new legislation. We strive to keep up to date with current and accurate claim options.
When to Claim Employee Retention Tax Credit (ERTC)
The Employee Retention Tax Credit can be claimed in the year that the wages were paid. This means you cannot claim expenses from previous years, even if they were not reimbursed until this year. In addition, businesses cannot carry over any unused portion of the credit to future years.
Repaying Employee Retention Tax Credit (ERTC)
If your business receives repayment for Employee Retention Tax Credits, it must include the amount repaid as income on your tax return for the year received. The repayment will reduce any refund or increase any amount owed for that year. It’s important to note that businesses may have to repay all or part of the Employee Retention Tax Credit if it was claimed in error or if the credit was more than the business was entitled to receive.
The Employee Retention Tax Credit is used to offset both income and payroll taxes. However, businesses must repay any amount received if it was claimed in error or if the credit was more than the business was entitled to receive. For more information about eligibility and repayment, consult with Benchmark Human Capital and learn more about ERTC!