We can all agree that 2020 and 2021 were one of the most difficult and disruptive years of our modern time. However, as the situation improved legislation passed historic actions to decrease the pressure on businesses that were struggling.

As part of this aid, some of the businesses that had their operations fully or partially suspended due to the COVID-19-related governmental order or experienced a significant reduction in gross receipts will be eligible for an Employee Retention Credit.

We Ca Care Association are committed to educating, preserving, and developing Home and Community-Based Programs that enhance the safety and well-being of California's most vulnerable residents in senior and adult communities; that is a self-determined and person-centered approach.

That is why as part of our commitment to preserve and inform the community, we’re presenting this new Employee Retention Credit opportunity. If your business also suffered from any of these issues. We're here with some good news! As a business owner, you may be eligible for a retention credit. 

Employee Retention Credits are used by employers in order to decrease retention costs and help offset federal payroll taxes including FICA wages paid as well income tax withholding components from those payments made towards employee benefits packages like healthcare coverage.

What are the Benefits?

The maximum payroll tax credit an employer can receive is $26,000 per employee. The potential payroll tax credit can be substantial as it’s calculated per employee as such:

• For tax year 2020: $5,000 per employee per year.

• For tax year 2021: $7,000 per employee per quarter, which translates into a maximum credit of $21,000 per employee for 2021.

Who Qualifies?

For example, one employee making $40,000 a year would qualify for $5,000 in 2020. That same

employee in 2021 would qualify for $7,000 per quarter for the first three quarters resulting in $21,000 in tax credits. Thus, just one employee would earn the employer $26,000 in refundable tax credits between the two tax years. A company with 5 employees, using the same example would earn $130,000 in tax credits.

To claim ERC in any given calendar quarter, organizations must meet one of the following criteria(s):

• Operations were fully or partially suspended due to novel coronavirus (COVID-19)-related limits on commerce, travel, group meetings due to COVID-19; or

• The organization experienced a significant decline of 50% or greater in gross receipts during the calendar quarter compared to 2019.

• For 2021, the gross receipts eligibility threshold for employers is reduced from a 50% decline to a 20% decline in gross receipts for the same calendar quarter in 2019 or the prior quarter.

• Employers not in existence in 2019 may compare 2021 quarterly gross receipts to 2020 quarters to determine eligibility.

This is a great opportunity for Residential Care Providers to take advantage of. By improving working conditions and wages, they will be able to keep their employees happy and reduce turnover. Additionally, by reinvesting in long-term staffing, they can ensure that they have a stable workforce for the future.

This will help them save money in the long run and keep their business running smoothly. If you want to know more fill out the form below and one of our expert representatives will contact you to inform you about the process.