“Never heard of this one”: Small businesses encouraged to claim payroll tax credit
Concerned that people don’t know enough about the employee retention tax credit, a Washington man created a website and software to spread the word.
PORTLAND, Oregon – Many small businesses continue to struggle after months of closures and restrictions. Including The By-Pass Bar and Grill in Dayton. General manager Mylee Smith opened the Yamhill County business shortly before the pandemic hit, only to have to back down to save it.
“Probably the hardest thing was telling my people they were out of jobs,” Smith said. “It’s really hard to go from open to close, inside to outside, from 25% capacity to 50% capacity… it’s all crazy.”
Luckily for Smith, she was successful and eventually rehired all of her employees. She also asked for help with the Paycheck Protection Program. However, there was another source of financial aid that she had initially overlooked: the Employee retention tax credit (ERTC).
“I’m the one who finds all these grants and stuff, but I had never heard of this one,” Smith said.
Smith got wind of the ERTC through Tom Sauvageau, a small business finance and accounting consultant based in Enumclaw, Wash. Sauvageau was so struck by the few employers and even accountants who seemed to know about ERTC, he launched a website called ERTCFiling.com.
“The reason I was drawn to this initially,” said Sauvageau, “is that it’s not a tax credit for businesses. This is a small business tax credit. “
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Through Sauvageau’s website, people can purchase software similar to TurboTax, which helps them file for ERTC. There is also a free calculator that anyone can use to estimate how much they might be eligible for.
Sauvageau suggested doing this before purchasing his software or calling his accountant to inquire.
More than anything, Sauvageau said he just wanted people to know that the ERTC exists.
“Unless they know it, how are they going to get it?” Said Sauvageau. “I don’t care if they go through me or anywhere else, it’s the educational part of making sure they understand how important it is, how important it is.”
In 2020, eligible businesses could file an ERTC claim of up to $ 5,000 per employee for the entire year. In 2021, the maximum credit has increased to $ 7,000 per employee, per quarter. This means a maximum of $ 28,000 per employee each year. To qualify for the ERTC, small business owners must have been affected by at least one partial shutdown, such as reduced capacity restrictions. They must reapply for ERTC on a quarterly basis.
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After working with Sauvageau, Smith learned that she had qualified for approximately $ 34,000 through the ERTC.
“Even though I had already filed taxes in 2020, Tom was able to go back and do it again and apply this tax credit for me,” Smith said.
Smith planned to use some of the money to buy a new cooler for the restaurant and eventually hire another employee. At present, Yamhill County is still in the high risk category, forcing Smith to operate at just 25% of capacity.
As the challenges continue, she is grateful for all the help she can get.
“We’re just one of those small businesses that really depend on our small community. “