Employee Retention Tax Credit for Staffing Agencies
As a staffing agency, the COVID-19 pandemic has undoubtedly affected your business. Many staffing agencies have experienced a significant loss of revenue and have struggled with retaining employees. However, there is good news. Staffing agency owners may be eligible for up to $26,000 per employee through the Employee Retention Tax Credit (ERTC).
The ERTC is a refundable tax credit aimed at encouraging employers to retain employees during the pandemic. It is available for staffing firms and recruiting agencies affected by COVID-19. The tax credit offers up to $7,000 per employee per quarter in refundable tax credits for the first three quarters of 2021 and up to $5,000 per employee for March 13 through December 31 of 2020. Many staffing firms may not be aware of this tax credit, and this article seeks to provide more information about the ERTC, how it applies to staffing agencies, and how staffing agencies can claim the tax credit.
In this article, we will discuss the qualifications for the ERTC, how much staffing agencies can receive from the tax credit, the deadline for claiming the ERTC, how to claim the ERTC, and retroactively claiming the tax credit. Let's dive into the details.
Qualifications for ERTC
To qualify for the Employee Retention Tax Credit, staffing agencies must meet certain requirements.
Decline in Revenue Requirement
One of the qualifications for the ERTC is a significant decline in revenue. Staffing agencies must show that their gross receipts for a quarter in 2020 or 2021 were less than 80% of their gross receipts for the same quarter in 2019. If a staffing agency did not exist in the same quarter in 2019, they can use the corresponding quarter in 2020 as a reference point. This information was provided by LinkedIn.
COVID-Related Suspension of Operations Requirement
Another qualification for the ERTC is a COVID-related suspension of operations. Staffing agencies must show that they were either fully or partially suspended due to a government order related to COVID-19. Alternatively, staffing agencies can show that they had a significant decline in gross receipts. This information was provided by Citrin Cooperman.
It is important to note that staffing agencies cannot claim the ERTC for the same wages used to determine the eligibility for the Paycheck Protection Program (PPP) loan forgiveness. Additionally, staffing agencies that received a PPP loan in 2020 or 2021 can only claim the ERTC for wages that are not paid with the proceeds of the forgiven PPP loan.
Amount of ERTC
The amount of money that staffing agencies can receive from the ERTC can be quite substantial.
How Much Staffing Agencies Can Receive
According to Haley Marketing, eligible businesses can receive up to $23,000 per qualified employee. For the first three quarters of 2021, staffing agencies can receive up to $7,000 per employee per quarter in refundable tax credits. For wages paid between March 13 and December 31 of 2020, staffing agencies can receive up to $5,000 per employee.
Examples of the Amount of Money Staffing Agencies Can Receive
To give an idea of the amount of money staffing agencies can receive from the ERTC, consider the following examples:
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A staffing agency with 20 employees can receive up to $460,000 in tax credits if they qualify for the maximum amount of $23,000 per employee.
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A staffing agency with 100 employees can receive up to $2.3 million in tax credits if they qualify for the maximum amount of $23,000 per employee.
It is important to note that the amount of money staffing agencies can receive from the ERTC varies depending on the number of employees, the length of the qualifying period, and the amount of qualified wages. This information was provided by Vimeo.
Differences in Amount between 2020 and 2021
It is also worth noting that the amount of money staffing agencies can receive from the ERTC differs between 2020 and 2021. In 2020, staffing agencies can receive up to $5,000 per employee for qualified wages paid between March 13 and December 31. In 2021, staffing agencies can receive up to $7,000 per employee per quarter for the first three quarters of the year. This information was provided by Haley Marketing.
How to Claim ERTC
Claiming the Employee Retention Tax Credit can be a complex process. Staffing agencies should seek assistance from experts to ensure compliance with ERTC guidelines.
Seeking Assistance with ERTC
According to LinkedIn, employers should seek assistance from experts like Bottom Line Concepts to help them claim the ERTC. MJA & Associates can also assist staffing agencies with determining eligibility, calculating tax credits, and ensuring compliance with ERTC guidelines.
Filing Form 941
Staffing agencies must file Form 941 to claim the ERTC. The deadline for filing Form 941 has been extended until December 31, 2021. Staffing agencies can claim the ERTC on Form 941 for wages paid in the same quarter that they are filing. This information was provided by The Staffing Stream.
Retroactive Claiming of ERTC
Staffing agencies can retroactively claim the ERTC for qualified wages paid in 2020 and 2021. The statute of limitations for staffing agencies to conduct a lookback to determine eligible wages is a minimum of three years from the filing of Form 941. This information was provided by The Staffing Stream.
Restrictions on ERTC Qualifications
It is important to note that the government could restrict ERTC qualifications at any point. Staffing agencies should stay up to date on any changes to ERTC qualifications. This information was provided by LinkedIn.
Conclusion
Staffing agencies that have been affected by the COVID-19 pandemic should consider claiming the Employee Retention Tax Credit. The ERTC can provide substantial tax credits for staffing agencies that meet the qualifications. However, claiming the ERTC can be a complex process, and staffing agencies should seek assistance from experts to ensure compliance with ERTC guidelines.
It is important to note that the amount of money staffing agencies can receive from the ERTC varies depending on the number of employees, the length of the qualifying period, and the amount of qualified wages. Additionally, staffing agencies cannot claim the ERTC for the same wages used to determine the eligibility for the Paycheck Protection Program (PPP) loan forgiveness.
Staffing agencies must file Form 941 to claim the ERTC, and the deadline for filing Form 941 has been extended until December 31, 2021. Retroactive claiming of the ERTC is possible, and staffing agencies have a minimum three-year statute of limitations from the filing of Form 941 to conduct a lookback to determine eligible wages.
The government could restrict ERTC qualifications at any point, and staffing agencies should stay up to date on any changes to ERTC qualifications.
Overall, the Employee Retention Tax Credit can provide much-needed financial relief for staffing agencies affected by the COVID-19 pandemic. Staffing agency owners should consult with experts and carefully consider their eligibility before claiming the ERTC.
Expert Assistance for Claiming ERTC
The process of claiming the Employee Retention Tax Credit (ERTC) can be complex, and staffing agencies should seek assistance from experts to ensure compliance with ERTC guidelines.
How Can Experts Help?
Experts can help staffing agencies with the following:
- Determining eligibility for ERTC
- Calculating tax credits
- Filing Form 941
- Ensuring compliance with ERTC guidelines
- Staying up to date on any changes to ERTC qualifications
Bottom Line Concepts
According to LinkedIn, Bottom Line Concepts is one of the expert firms that staffing agencies can turn to for assistance with claiming the ERTC. Bottom Line Concepts specializes in helping businesses maximize their tax credits and has helped businesses claim over $500 million in tax credits.
MJA & Associates
MJA & Associates is another expert firm that can help staffing agencies claim the ERTC. According to Haley Marketing, MJA & Associates can assist staffing agencies with determining eligibility, calculating tax credits, and ensuring compliance with ERTC guidelines.
Benefits of Seeking Expert Assistance
Seeking expert assistance with claiming the ERTC can provide staffing agencies with the following benefits:
- Maximizing tax credits
- Ensuring compliance with ERTC guidelines
- Saving time and resources
- Staying up to date on any changes to ERTC qualifications
Overall, staffing agencies should consider seeking expert assistance with claiming the ERTC to ensure they receive the maximum tax credits and comply with all guidelines.
Learn More About ERTC and Staffing Agencies
We hope this article has provided valuable information about the Employee Retention Tax Credit (ERTC) and how staffing agencies can claim it. If you would like to learn more about ERTC and staffing agencies, please check out the following resources:
Employee-Retention-Credit.info
Employee-Retention-Credit.info is a website that provides in-depth information about the ERTC. Staffing agencies can learn about eligibility requirements, qualified wages, and how to claim the ERTC on this website. Employee-Retention-Credit.info also provides expert assistance with claiming the ERTC.
Haley Marketing
Haley Marketing is a leading provider of marketing services for staffing agencies. They offer a range of services, including website design, social media marketing, and content marketing. Haley Marketing's blog also provides valuable information about ERTC and other topics related to staffing agencies.
The Staffing Stream
The Staffing Stream is a website that provides news and insights for the staffing industry. They have published several articles about ERTC, including how staffing agencies can claim it and what they need to know about retroactive claiming. The Staffing Stream is a great resource for staying up to date on the latest news and trends in the staffing industry.
Thank you for reading this article about ERTC and staffing agencies. We hope you found it informative and helpful. Be sure to check out our other great content for more insights and information about the staffing industry.
Questions
Who is eligible for the Employee Retention Tax Credit for staffing agencies?
Staffing agencies that have experienced a decline in revenue due to the COVID-19 pandemic may be eligible for the Employee Retention Tax Credit.
What is the maximum amount staffing agencies can receive from the ERTC?
Staffing agencies can receive up to $7,000 per employee per quarter in refundable tax credits for the first three quarters of 2021 and up to $5,000 per employee for March 13 through December 31 of 2020.
How can staffing agencies claim the Employee Retention Tax Credit?
Staffing agencies must file Form 941 to claim the ERTC. Staffing agencies should also seek assistance from experts to ensure compliance with ERTC guidelines.
What is the deadline for claiming the Employee Retention Tax Credit for staffing agencies?
The deadline for claiming the ERTC has been extended until December 31, 2021. Staffing agencies should file Form 941 by this date to claim the ERTC.
How does the Employee Retention Tax Credit affect PPP loan forgiveness for staffing agencies?
Staffing agencies cannot claim the ERTC for the same wages used to determine the eligibility for PPP loan forgiveness.
What happens if staffing agencies do not claim the Employee Retention Tax Credit?
Staffing agencies that do not claim the ERTC may miss out on substantial tax credits that can provide much-needed financial relief during the COVID-19 pandemic.
What if the government restricts the qualifications for the Employee Retention Tax Credit for staffing agencies?
Staffing agencies should stay up to date on any changes to ERTC qualifications. Seeking expert assistance can help staffing agencies navigate any changes to ERTC qualifications.
