The CARES act (Coronavirus Aid Relief and Economic Security) seeks to aid small businesses to keep their workforce during the uncertain period post COVID19. It entails the federal government offering disbursements depending on the tax they collect from a company payroll. The refundable credit will help the small and medium enterprises keep their workforce while paying them even when the employee cannot work due to the crisis. However, the ERC for Texas businesses has specific requirements that you must attain to be eligible for the government incentive. Read on to learn more about the criteria and the application process.

Eligibility

Employers and employees are eligible for the employee retention tax credit program. First, the business should have fully or partially halted its operations due to government orders seeking to curb the spread of the virus. Still, you must oblige with your tax requirements before qualifying for the credit. In addition, the revenues during the coronavirus period should have been reduced by more than 20% and have a workforce of not more than 500 employees. Employers with more than 500 employees will get the credit for the staff members who are not working. But, enterprises with less than 500 workers can get aid for all their human resources.

On the other hand, some workers may be ineligible for the tax credit depending on their relationship: The owner, their spouse, children, sibling, extended family and those that relate in law. So, it is critical to go through the eligibility list before applying for the government program. The amount a business receives will differ yearly as the government revises the requirements. Currently, the criteria are more expansive than it was in 2020. It is critical to follow up on the changes as the authorities update the information on their websites. At the same time, you can get valuable information to aid your application.

How to Claim

You can claim the benefits if you are eligible for the employee retention tax credit program. The business must report on their wage obligations and costs on insurance cover for employees. They should include the information on the quarterly tax returns report. Several government programs are seeking to aid small businesses post COVID19 to deal with its impact on the economy. Once you take the employee retention tax credit relief, your business will not be eligible for the paycheck protection program or other incentives falling in the same category.