Running a business in South Carolina is work. Retaining employees is one of the biggest challenges for South Carolina businesses. Combined with a volatile economy, the situation is dire. With the Employee Retention Tax Credit (the ERC or the ERTC) still available in 2023, South Carolina businesses still have time to cash in on this incentive to support small business America. We will examine the employee retention credit in this article, including its eligibility criteria and the benefits it offers to South Carolina businesses.
How does it work?
The ERC is a temporary refundable payroll tax credit designed to help businesses recover from COVID-19 impacts. The CARES Act encourages businesses to keep employees on their payroll. This does not have to be paid back and is fully refundable even when taxes are not owed. For 2020, you can receive up to $5,000 per employee and up to $21,000 for 2021.
Who qualifies?
Any business in any industry that experienced a significant decline in sales or revenue when comparing a quarter from 2020 or 2021 to the same quarter in 2019. Or any business that had to shut down for a period due to governmental orders.
What are the advantages of the ERC for South Carolina businesses?
For businesses who are having difficulty retaining employees or have lost workers due to the financial difficulties caused by the pandemic, the credit is a significant victory. Through the ERC, South Carolina businesses will be able to save money, retain employees, and rehire workers who lost their jobs during the pandemic.
Benefits of the employee retention tax credit include
- A fully refundable tax credit that can reduce payroll taxes for eligible employees
- A credit of up to $26,000 per employee for the entirety of ERC availability
- Eligible businesses can use the ERC credit to cover employee payroll costs or use it for their own operating expenses, but not both.
With the employee retention tax credit, businesses in South Carolina will be able to streamline operations, focus on growth and innovation, and offer competitive salaries and benefits to their employees.
As a result of the pandemic’s economic fallout, the ERC provides financial assistance to businesses in order to help them continue to operate, retain employees, and rehire those who have lost their jobs. In addition to providing businesses with financial incentives, it also reduces the payroll tax burden, which can otherwise hinder the growth of South Carolina’s economy. As a result, South Carolina businesses should take advantage of the employee retention tax credit in order to save money, grow their operations, and retain the best employees.
For South Carolina businesses, the employee retention tax credit represents a game-changing opportunity.
Author: Danielle Michel,
CPA, President and Founder of MTRS
Danielle Michel, CPA (she/her) is a Certified Public Accountant and founding president of MTRS, a specialized firm based out of Charleston and Long Island that focuses on the Employee Retention Tax Credit, the Research and Development Tax Credit, and Sales Tax Recovery. MTRS was founded to help American manufacturers and businesses across all industries maximize their bottom lines without compromising their pockets… Or innovative calendars. Our insights provide a look into topics facing American businesses, but are not financial advice. For digestible information and practical tools for understanding the tax landscape as a business owner visit our FAQ or contact MTRSNow.