Your Employees Can Earn You Tax Credits

The COVID-19 pandemic affected almost every aspect of our daily lives, including our livelihoods. If you’re a child care provider, chances are that the pandemic hit your livelihood especially hard. Staying in business has been a challenge for many child care businesses, as has keeping employees on your payroll. But if you were able to keep your employees employed during the pandemic, you could be eligible for the Employee Retention Tax Credit (ERTC).

The ERTC is a refundable tax credit – meaning it’s a tax credit that comes back to you in the form of cash – for businesses that kept W-2 employees employed during the pandemic. Businesses that have W-2 employees and experienced any of the following between March 15, 2020 and September 30, 2021 may be eligible:

• A closure due to local or state government order

• A decrease in the number of children you could serve

• A decrease in revenue from 2019 to 2020 or 2019 to 2021

While the ERTC program ended on September 30, 2021, you can apply for the credit for 2020 and 2021 retroactively. You can do so through a simple update to your quarterly Form 941 that is submitted for all employees to the IRS.

This credit puts significant funds back into your hands. In a Texas child care business coaching program, providers accessing ERTC had an average estimated credit of $121,598! To learn more, read our detailed guide to the Employee Retention Tax Credit.

Note: If you are a child care provider in Texas, Virginia, Indiana, or Wisconsin you may be eligible for free business coaching from Civitas Strategies Early Start on the ERTC or any child care business topic. Learn more at CSEarlyStart.com.

Photo 230929778 © Designer491 | Dreamstime.com