Did you know that about half of non-retired adults agree that the impact of the coronavirus has made it hard for them to reach their long-term financial goals?
That’s why programs were put into place to help people navigate the tough and sometimes confusing roads of financial stability in a time of great instability.
For instance, have you heard about PPP loans? Or the Employee Retention Credit?
If you are wondering what is the Employee Retention Credit or PPP loan, you will find some answers here.
Read on to find out more about each, the difference between the two, and use this as your Employee Retention Credit guide and PPP loan guide.
So What Is the Employee Retention Credit?
To put it in simple terms, this is a relief measure to help out businesses due to the Coronavirus pandemic.
This refundable tax credit is equal to 50 percent of qualified wages employers paid their employees between March 13, 2020, until June 30, 2021. After December 31, 2020, the refundable tax credit went up to equal 70 percent of wages.
These tax credits for employers are limited to $10,000 per employee, per calendar quarter in 2021. So, the maximum amount an employer can get per employee per quarter is $7,000.
So who qualifies for this credit? Only eligible employers, which includes businesses that had to fully or partially stop operating due to the government orders during the pandemic.
You also qualify if your business experienced a serious decline in gross income due to the pandemic, closures, and evolving health department rules.
If you suspect your business qualifies for the ERC, there are many companies who can help with Employee Retention Credit advice. You can apply for ERC here to find out what your options are.
What Is a Ppp Loan?
A Payment Protection Program loan is a program that was also meant to help struggling businesses during the coronavirus pandemic.
PPP loans are forgivable loans given to small businesses so they could continue to pay their employees through the pandemic.
As of now, the government had authorized about $669 billion to be used for PPP loans. This was to encourage small businesses to stay in operation and keep employees on their payroll as best as they could throughout the closures of the pandemic.
PPP loans are eligible to be forgiven if certain requirements are met. Some of these requirements include the business maintaining employee and compensation levels in the 8 to 24 week period after the loan is distributed.
Your loan proceeds must also be spent only on payroll costs and eligible business expenses. In fact, at least 60 percent of the loan must be used on payroll costs.
Learn More About Loans Today
If this article answered your question, “What is the Employee Retention Credit?” or “what are PPP loans?” there is more where that came from.
Whether you want to learn more about loans or business news, there are plenty of articles to answer your questions. Browse through our economy or business section today to find out all the latest news and updates that may affect your business.