Did your small business lose revenue in 2021 as a result of the pandemic? If so, then the American Rescue Plan could grant you a $28,000 tax credit for FY2021.
That’s only the tip of the iceberg, too.
There are other small business tax credits you need to know about before you file in 2022. Are you ready to get started? Read on to discover some of the most important tax credits you could be eligible for this year.
Employee Retention: American Rescue Act
President Biden’s American Rescue Plan created the 2020 and 2021 employee retention credit. This small business tax credit is available for all four quarters of 2021. To qualify, you must have suffered a 20% decline in gross receipts during a quarter.
The credit is for up to $7,000 per employee each quarter.
Paid Family and Medical Leave: Form 8994
The best accounting firm will always recommend this credit. You can get up to 12.5% of wages paid to employees on medical leave if you:
- Have a written policy with two weeks of leave each year
- Pay at least 50% of wages on paid leave
This credit benefits both your business and your employees.
Research and Development Tax Credit: Form 6765
Does your business engage in research activities? If your company does the following, then you might want to research this credit:
- Develops pro types
- Develops proprietary products
- Has patents
- Makes new processes
- Improves product or service efficiency
If eligible, then you’ll qualify for a 10% tax credit on research and development costs. Head to https://tri-merit.com/services/research-and-development-tax-credits/ if you’re interested in this credit.
Work Opportunity: Form 5884
Have you hired an ex-felon, veteran, or former unemployed citizen? Are some of your employees getting SSI benefits or food stamps?
If so, then you could apply for the work opportunity credit. You could get up to 40% of the first $6,000 of the employee’s first year of wages.
Disabled Access: Form 8826
Business ownership often means providing equal opportunities and access for customers and employees. So long as you make less than $1 million as a small business owner, you’re eligible for this credit.
You can cover up to 50% of the costs associated with upgrading your facilities.
Employer-Provided Childcare: Form 8882
Has your small business ever considered paying for an employee’s child care? If so, then you could claim up to 25% of child care expenditures as a tax credit.
You can also seek an extra 10% of child care referral expenditures. These costs go towards helping employees secure good child care resources.
Are You Eligible For These Small Business Tax Credits?
Do you think your small business qualifies for the above small business tax credits? If so, then be sure to locate and fill out the appropriate forms. That way, your business can enjoy the tax relief you deserve after such a rough few years.
Are you looking for more pro-tips to help your business thrive through this pandemic era? If so, then our blog is the best place to be. Keep browsing through our main blog page now to see more of our favorite content.