Taxes

ERC Tax Credit

EMPLOYEE RETENTION TAX CREDIT (ERC)

Congress updated the Employee Retention Tax Credit (ERC).  This tax credit encourages employers to take advantage up to $33,000 and you should discuss with your Tax Professional for professional advice.

Some of the documents required may include:

  • 2019 Profit and Loss Statement for all Quarters
  • 2020 Profit and Loss Statement for all Quarters
  • Q1-Q4 2019 IRS Form 941
  • Q1-Q4 2020 IRS Form 941
  • 2020 Group Healthcare statement by month  (track premium amount by employee)
  • 2021 Group Healthcare statement by month
  • Payroll Protection Program Loan Records (if applicable) and any loan forgiveness applications (if applicable)

The credit reduces your employer Social Security tax liability. Talk to your Tax Professional when filing your Form 941 to determine your qualification for the credit. 

As of July 1, 2021 New Employee Retention Tax Credit Provision article 

RD TaxCredit

research and development tax credit

Take advantage of economic incentives to conduct research in the United States. Reach out to tax professionals to access the Research and Development Tax Credit.

These economic incentives were implemented to stimulate research and development in industries of all sizes, to encourage companies to work together, and to transform the economic landscape.  If you design, develop, or improve products, processes, techniques, formulas, inventions, or software, you may be eligible.  There is currently a three-year look back period and if your qualified research activity qualifies the R & D Tax credit can be a dollar-for-dollar offset of federal income tax liability and, in certain circumstances, payroll tax liability.  

  • increased cash flow
  • increased earning per share
  • increased return on investment
  • reduced federal tax liability
  • reduced effective tax rate

Ask you Tax Professional to explain the four-part test to determine what activities qualify for the R & D tax credit. 

Read more:

https://www.irs.gov/pub/irs-regs/research_credit_basic_sec41.pdf

https://home.kpmg/us/en/home/insights/2020/03/tnf-reminder-opportunity-payroll-offsets-using-rd-tax-credits.html

https://www.thetaxadviser.com/newsletters/2020/aug/research-development-tax-credits-cash-infusion-businesses.html