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March 28, 2022 • Issue 22:03:02

Tax credit or tax bite – which regs

apply to you?

Keeping the economy humming

The pandemic forced many businesses to shutter in 2020
and 2021—about 800,000, according to Federal Reserve
estimates. But it didn't put a halt to business startups.
The U.S. Census Bureau reported nearly 5.4 million new
businesses were created in 2021. That's more than any other
year on record, the bureau said.

Meanwhile, the Fed noted in a 2021 economic report that
business closure rates were lower than predicted at the
start of the pandemic. While the Fed did not explain why,
most economists credit the PPP with keeping the doors
open at millions of small businesses. Many of those same
businesses qualify for Employee Retention Tax Credits
(ERTCs) and can receive refunds on payroll taxes paid in
2020 and 2021.
By Patti Murphy "A lot of businesses think these are too good to be true,"

he COVID-19 pandemic has shaken up the eco- said Tyler Kem, president of Strike Tax Advisory. They are
nomic status quo. But it's not all bad news, as not. Qualifying businesses can claim significant refundable
new federal tax benefits are available to help credits on payroll taxes paid between March 13, 2020 and
T companies that have been financially hard hit by September 30, 2021. Kem estimated that 80 percent of small
the pandemic. The irony is that many companies don't real- businesses have yet to take advantage of the ERTC.
ize these benefits are available, or that they may qualify.
Restaurants that were forced to close or scale back because
"The opportunity for pandemic-related tax credits is of government-imposed lockdowns could be the biggest
substantial," said Terracina Maxwell, president and co- beneficiaries. Yet Clarus estimated that only about one
founder of Clarus, a technology company that helps third of restaurant owners have applied for ERTCs. One
businesses secure employment tax credits. A recent survey restaurant that did, with the help of Clarus, was Varsity
of executives at 500 businesses, commissioned by Clarus,
found fewer than half have taken advantage of key state
and federal tax incentive programs.
Contributed articles inside by:
The Paycheck Protection Program was a boon to small Suresh Dakshina ...................................................................................18
businesses, doling out close to $1 billion in government-
backed loans to small businesses, with the majority of Jeff Fortney .............................................................................................30
those forgivable. Now, many of those same businesses may Saleem Khatri .........................................................................................32
qualify for refundable federal tax credits if they kept full-
time employees on payroll despite challenges posed by the Ken Musante ..........................................................................................34
pandemic.
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