Employee Retention Credit (ERC)
Have you heard of the Employee Retention Credit (ERC)? Ask your tax expert about it!
What is the ERC?
Initially, the ERC was a quarterly, refundable tax credit based on wages for business owners to retain staff during the Covid-19 pandemic. It was set at 50% of up to $10,000 in qualifying wages per employee for the last three quarters of 2020. The American Rescue Plan Act extended and expanded the ERC to include up to 70% of $10,000 in qualifying wages per employee per quarter in 2021, making it much more lucrative to business owners.
How do you qualify for the ERC? Businesses need to see a drop in revenue during specific quarters in 2020 and 2021 over 2019, or — and it's a big or — they had to be operating under significant government restrictions, including nearly all restaurants, daycares, and other businesses. That could add up to $26,000 per full-time employee over the entire credit. Businesses that took the PPP also still qualify—their PPP amount will be deducted from what they would get from the credit. Surprisingly, this can still be a significant amount.
When is the deadline? The credit begins to expire quarter by quarter, beginning three years after the due date of the first quarter’s tax return. That means, right now, the deadline is until July 31, 2023, to get the total amount. However, Congress could always remove the tax credit at any point, so take advantage of it now!!
AAPISTRONG: Small Business Grants
The COVID-19 pandemic hit AAPI business owners across the country hard. Now, as signs of recovery emerge, the long tail of COVID's economic impact on small businesses continues.
AAPISTRONG: Small Business Grants will award Asian and Pacific Islander American-owned businesses cash grants and other valuable resources:
- $10,000 cash awards to give a boost to 40 AAPI business owners who launched their businesses during the pandemic
- $25,000 cash awards to 60 AAPI business owners who launched before the pandemic and made it through, where a cash grant could help take their vision to the next level.
- Applications are now open and will close on July 26.
Hill Updates:
- This week in the Senate, some Democrats are arguing to revive President Biden’s legislative agenda. This would include raising taxes on some high-income individuals and cutting prescription drug costs, which they believe will address the inflation issues.
- NAWBO National and many other organizations sent a letter to Capitol Hill in opposition to the Net Investment Income Tax. According to recent media reports, there are two potential tax increases that would fall on small, individually, and family-owned businesses. Click here to see the letter written on your behalf.
- Meanwhile, on the House side, the Biden Administration was pitching the need to pass legislation designed to boost semiconductors' domestic production, warning of the national security and economic harm that could come with inaction. The House and Senate have passed much larger legislative packages designed to improve U.S. competitiveness with China. But the bills — known as “America COMPETES” in the House and “USICA” in the Senate — have been stalled for weeks in tough conference negotiations between the chambers with no resolution in sight.
- Also, in the House this week, the lower chamber passed the one piece of legislation that crosses the finish line every year—the annual defense policy bill. The bill passed with a bipartisan vote of 329-101. The bill authorizes nearly $840 billion in defense spending for the fiscal year 2023, approving a $37 billion boost to President Biden’s defense budget.
House Hearings
- Today, The Committee on Small Business Subcommittee on Contracting and Infrastructure will hold a hybrid hearing titled: “A Review and Assessment of the SBA HUBZone Program.” The hearing focused on the Historically Underutilized Business Zone (HUBZone) program administered and overseen by the Small Business Administration. To view the archived hearing, click here.
- The Committee on Small Business Subcommittee on Economic Growth, Tax, and Capital Access will hold a hybrid hearing titled: “The SBA Office of International Trade and the STEP Program as Key Tools for Recovery and Expansion.” The hearing begins at 10:00 A.M. on Tuesday, July 19, 2022. The hearing will review the Small Business Administration’s (SBA) State Trade Expansion Program (STEP). To view a livestream of the hearing, click here.
- The Committee on Small Business Subcommittee on Underserved, Agricultural, and Rural Business Development will hold a hybrid hearing titled: “SBA District Office Collaboration with Resource Partners.” The hearing begins at 10:00 A.M. on Wednesday, July 20, 2022. During this hearing, the Committee will review the relationship between the district offices and SBA resource partners. To find the link to access the hearing live, click here.
Senate Hearings
- Today, the U.S. Senate Small Business and Entrepreneurship Committee held a hearing entitled “Oversight of SBA's Office of Disaster Assistance.” To see the archived hearing, click here.
Biden Administration Updates:
- The Small Business Administration’s Office of Advocacy released its small business lending report, which examines FDIC data to determine the state of bank lending to small businesses. This report, which analyzes loan data from June 2019 to June 2020, examines the small business lending market at the beginning of the COVID-19 pandemic. Small business loans (loans below $1 million) increased by nearly 40% from 2019 to 2020, largely due to the newly enacted Paycheck Protection Program.
- America's Seed Fund Week is a collaborative series of events connecting entrepreneurs working on advanced technologies and the organizations that support them to the country’s largest source of early-stage funding – America’s Seed Fund, the Small Business Innovation Research (SBIR), and Small Business Technology Transfer (STTR) programs. Whether you’re a new entrepreneur, existing small business, or entrepreneur support organization, join America's Seed Fund Week virtual event on July 18-22, 2022, to hear directly from federal agency program managers that invest over $4 billion in over 7,000 new awards annually and celebrate 40 years of small business innovation. Register
- Register for the Nasdaq Entrepreneurial Center's 2022 Fall Milestone Makers Program
The Nasdaq Entrepreneurial Center (NEC) is committed to investing in individuals taking significant risks to solve problems in new ways. Milestone Makers is a way to help mid-stage entrepreneurs set, hit, and celebrate milestones critical to company growth. The NEC works with a small cohort of entrepreneurs one-on-one to define a critical business goal and accelerate their path to achieving it.What does the program offer?
The program begins with access to the Nasdaq Entrepreneurial Center’s prestigious network, partners, and community, including professional resources from leading industry experts. This includes:- Milestone setting strategy and practice for this quarter
- Coach (1:1 professional coaching)
- Business mentors and peer support
- Development of key marketing assets, including participants' photo & logo on the Nasdaq tower in Times Square, New York City, upon graduation. Plus, media coverage and distribution through the Nasdaq Center and Nasdaq media.
- In partnership with its sponsors, the NEC is proud to make this 12-week program free with a pay-it-forward philosophy. Milestone Makers return to teach, share, and nominate the next cohort of great leaders. Register
- T.H.R.I.V.E. Emerging Leaders Reimagined
Small business owners and executives: Accelerate the growth of your business through T.H.R.I.V.E. Emerging Leaders Reimagined, a free advanced training series customized for your needs. Apply now. This training is not for start-ups or people thinking about starting a business. T.H.R.I.V.E. Emerging Leaders Reimagined advanced training series is open to small business owners and executives that:- Have annual revenues of at least $250,000
- Have been in business for at least three years
- Have at least one employee other than self