How Salon Owners Can Claim The Employee Retention Credit
There’s a federal tax credit that’s helping salon owners get hundreds of thousands of dollars—and you could be eligible for it. The Employee Retention Tax Credit (ERC) is available to business owners with employees who were affected by the pandemic, and we have the details on how you can claim the ERC.
First, to answer your biggest questions—yes, this is real, and yes, this is free money. It’s a government program specifically for business owners with employees. Salons have reportedly been able to get ERC in values from $46,000 to $262,000, said Naomi Prusinski, CEO of Be Better Salon Accelerator. IHub Meta has contracted with Bottom line concepts to help salons wade through the confusing IRS lingo and file for the ERC on their behalf with no fees or upfront cost to Salon owners. You can learn how to claim your money and schedule a call here.
What is the Employee Retention Credit?
The ERC is a federal payroll tax credit to give businesses affected by the pandemic a way to keep employees on their payroll (and off unemployment). Established by the CARES Act of 2020, the ERC has been modified a few times since then, and was recently sunset as of the end of 2021. However, eligible businesses can still claim the ERC retroactively.
“You have the next couple of years to file, but they change the qualifications all the time,” “The program is constantly changing, which makes it so difficult.” but the experts at Bottom Line can help you make sense of at all and get your money.
Is the Employee Retention Credit A Loan?
No, it’s important to understand that the ERC is NOT a loan or deferral of any kind—it does not need to be repaid. This is literally a tax credit that eligible salons can claim against their quarterly payroll tax bill. If the credit is greater than the amount you pay for federal unemployment taxes, you will get a check from the IRS.
How Much Of A Credit Does The ERC Give?
In 2020, the ERC entitled employers to a credit worth 50% of qualified wages paid to employees from March 12, 2020 to the end of 2020. The max credit during 2020 is $5,000 per employee. In 2021 the tax credit became 70% of up to $10,000 of qualified wages per quarter, with the max credit being $7,000 per employee per quarter. The max credit available is $26,000 per employee.
Determining the amount of tax credit is pretty complicated, and even hard to figure out by an accountant or your tax professional that is why it makes sense to work with the top company that specilizes in ERC recovery. It cost you nothing but a phone call to see if you are eligible, and they only get paid when you do. There are no upfront cost, and the call is free. Schedule your call here, you will probably happy you did.
- An Ohio Valley-area salon owner opened a second location during the pandemic to get more space for her employees to work. She was eligible for about $262,000 through the ERC.
- One stylist worked at a salon that closed during the pandemic, so she opened her own salon and hired everyone from the closed salon. She was eligible for $200,000 through the ERC.
How Do I Know If My Salon Is Eligible For The ERC?
First, you have to have employees. If you don’t, this won’t apply to you. Next, you have to demonstrate that your business was affected by COVID-19. You must show that either one of these two scenarios applied to you:
- You’ve experienced a full or partial stop to your business because of government mandated shutdowns, and that the shutdown resulted in loss of money.
- Your business experienced at least a 50% reduction in revenue in 2020, or a 20% reduction in revenue in 2021.
To claim the ERC for 2021, you must demonstrate either of these scenarios on a quarter-by-quarter basis. “Almost everybody would qualify for at least one quarter,” say the professionals at Bottom Line.
How Long Does It Take To Get A Check?
Once you do these forms, it takes 4 to 6 months to get the checks back from the IRS. The folks at IHub Meta and Bottom Line will keep you informed throughout each stage of the process.
I Got a Payroll Protection Program (PPP) Loan—Can I Still Get The ERC?
You sure can. Just keep in mind that any wages paid using forgiven PPP loan funds are not considered “qualified wages” for the ERC, but when you have you intro call with a pro at Bottom line, they will thoroughly explain the entire process and answer any questions you have.
Don’t Procrastinate, CLICK HERE AND LEARN MORE NOW, while it is fresh on your mind. This program will ends in the near future, so go ahead and get the process started would be my advice.