Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Contractors: Employee Retention Credit

Name: Painting Contractors: Employee Retention Credit
Uploaded: 2023-04-14T11:09:04+00:00
Duration: 59 s
Channel: Daniel Honan
Description: The video explains that the Employee Retention Credit (ERC) is a refundable payroll tax credit that painting contractors may be eligible for. To qualify…

14 Apr 2023 · 1 min

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The video explains that the Employee Retention Credit (ERC) is a refundable payroll tax credit that painting contractors may be eligible for. To qualify, a business must have W‑2 employees in 2020 or 2021 and meet at least one of two conditions: (1) a reduction in gross revenue compared to 2019 that meets the required percentage threshold, or (2) a full or partial government‑ordered shutdown or supply‑chain disruption that materially (more than roughly 10%) affected operations. The speaker outlines how to assess the revenue‑reduction test by reviewing financial statements, and how to document a qualifying government order for the shutdown/disruption test. The segment concludes by urging viewers to consult a tax professional before filing a claim.

Chapters

The employee retention credit is a refundable payroll credit that some painting businesses may qualify for. Now, to qualify, you must have W-2 employees in 2020 or 2021, and you must have at least one of the following items to occur: one, a reduction in tax basis revenue relative to 2019, or number two, a full or partial government shutdown where the government order causes a modification to your operations and had a more than nominal impact, or the government order caused a disruption to your supply chain and had a more than nominal impact. Now for number 1, the reduction in revenue, this is a straightforward to determine. You just look at your financials and see if you meet the percentage reduction for the year in question. And then for the second one, for the full or partial government shutdown, you need a government order showing it impacted your business service line more than nominally, so more than 10% of your operations. So the bottom line here is that if you think you qualify for the Employee Retention Credit, seek advice from a tax professional before submitting.