Were you aware that the PPP and the employee retention credit can help a struggling business rebound?
The PPP and the employee retention credit allow many businesses to keep operating as they provide funds and reduce expenses. While similar, they both don’t offer the same thing and require different things for eligibility.
So what is the employee retention credit and PPP? We’ll go over all the main info you should know so you can start looking for different options.
Here’s an employer’s guide to the employee retention credit and PPP!
What Is the Employee Retention Credit?
The employee retention credit (ERC) was essentially designed to encourage employers to continue employing workers. With this credit, businesses can get compensated for hiring and paying employees instead of firing them.
Thanks to the employee retention credit, a business that’s struggling to receive enough income can get a tax credit to pay less. This not only ensures they continue operating, but also prevents people from having to apply for unemployment.
How It Works
Claiming an employee retention credit can be done like any other tax credit. When filing taxes, you can use a document to outline how much money you’ve paid. From there, the government can determine whether you’re eligible. Consider visiting a site like https://erctoday.com/ to learn more about how to claim the employee retention credit.
What Is the PPP?
The paycheck protection program (PPP) is much different than the employee retention credit as it allows businesses to apply for a loan. This loan is designed for businesses to cover employee wages and other business expenses.
When getting PPP money, the funds will be deposited directly to a business bank account. From there, it’s up to the owner to decide how to handle them, though they can face hefty fines if the government finds the owner misusing them.
Providing that an owner uses most of the funds for employee wages, the government won’t require them to pay the loan as they can apply for forgiveness.
How to Apply
The PPP and the employee retention credit are both similar in that they help businesses, but you must apply for the PPP to get compensation. You can apply for the PPP on the SBA’s website.
When applying, you must insert various information about your business. Things like the name, income, and wages must be reported. From there, they’ll determine how much you’re eligible for and you can decide whether you want the loan.
Consider Using the Employee Retention Credit and PPP
After reading this article, you no longer need to ask yourself, “What is the employee retention credit?” Referencing this info, you should decide which one would be right for your business. Depending on your situation, you may be eligible for both the employee retention credit and PPP. This would ensure you get as much as possible for your business.
Check out our other articles to learn more about employee retention vs PPP!