ERTC Grant For Realtors: Here's How To Claim Your ERC This 2023

As assistance under the CARES Act, the Employee Retention Tax Credit (ERTC) is a significant resource for realtors. It allows them to bounce back from the financial setbacks caused by unpredictable market shifts.

The ERTC is a refundable tax credit intended to incentivize eligible businesses, including real estate firms, to keep their employees on the payroll even during challenging economic conditions. It's calculated on the wages paid to employees, effectively reducing the tax burden and offering a lifeline to businesses navigating the financial turbulence of the post-pandemic era.

Now, why should realtors specifically consider the ERTC grant? The real estate industry relies heavily on full-time employees and independent contractors and is in a prime position to leverage the benefits of this grant.

The Employee Retention Tax Credit (ERTC) can assist in counterbalancing some of the payroll costs associated with retaining full-time employees, providing a financial cushion that can make all the difference in a competitive market. Extending the ERTC into 2023 is a timely opportunity for realtors to reassess their financial strategies and take advantage of this beneficial provision.

ERTC General Rundown

The ERTC refundable credit is a federal initiative to safeguard employment and stimulate economic growth in challenging circumstances. It is designed for businesses of all sizes and across various sectors, including the real estate industry.

The ERTC offers a percentage-based credit on certain employee wages, providing direct financial support to eligible businesses and enabling them to sustain their operations and retain their workforce. This credit is applied against the business's employment tax obligations, which can significantly reduce its overall tax liability.

Notably, the ERTC is fully refundable, meaning that if the credit exceeds the total amount of payroll taxes owed, the remaining balance is refunded to the business. The extension of the ERTC into 2023 shows the government's commitment to supporting businesses and fostering economic resilience in the post-pandemic landscape.

Applying for the ERTC in 2023

Businesses can still apply for a refundable payroll tax credit in 2023. The extension of the Employee Retention Credits into 2023 is welcome news for companies striving to recover from the economic fallout of the pandemic. If you are a realtor, this is an ideal time to take advantage of this provision.

The application process for the payroll tax credit is straightforward. First, you need to determine your eligibility, which is based primarily on your business operations and the impact of the pandemic on your gross receipts. It would help if you established that your business experienced a notable decline in gross receipts or was forced to partially or fully suspend operations due to government-imposed restrictions.

You can apply for the credit by completing Form 941, the Employer's Quarterly Federal Tax Return, and sending it to the IRS once you have determined your eligibility. If you have already filed your return but have yet to claim the credit, you can still do so by completing Form 941-X.

Remember, the ERTC is a refundable credit and doesn't have to be repaid, unlike the Paycheck Protection Program (PPP) loan. You can still benefit from the credit if your business does not owe employment taxes because the IRS will refund the excess.

Benefits of the Employee Retention Credit

The Employee Retention Credit (ERTC) offers many benefits specifically designed to support industries like real estate.

Cash Flow Boost:

One of the significant benefits of the ERTC is that it directly impacts your business's cash flow. Reducing your tax liabilities frees up funds that can be reinvested into your business operations or put toward other crucial expenses.

Stability During Uncertainty:

The ERTC provides a safety net for big enterprises and small business owners affected by unexpected economic turmoil. It offers financial stability that keeps operations running smoothly despite uncertain times.

Enhanced Employee Relations:

The ERTC allows an eligible employer to retain their workforce even during financial downturns. This helps maintain productivity and strengthens employee-employer relationships, boosting morale and fostering loyalty.

Competitive Advantage:

With the financial support provided by the ERTC, business owners can continue to invest in growth strategies, giving them a keen edge in the market.

Ease of Access:

The process to apply for the ERTC is designed to be straightforward and accessible. This simplifies the process for businesses and reduces the administrative burden.

Supports Independent Contractors:

For realtors, who often work with independent contractors, the ERTC can provide additional resources to maintain these vital relationships.

Future Planning:

The extension of the ERTC into 2023 provides businesses with the opportunity to plan, ensuring they have the financial support needed to navigate future challenges.

Remember, investing in your business and its people is investing in its future growth. The ERTC is a resource that can help you do just that. Claim your ERTC today and bolster your business for tomorrow.

How Does an Employee Retention Credit Work

The Employee Retention Credit operates based on incentivizing businesses to keep their employees on payroll during periods of financial difficulty. Essentially, when an eligible employer pays wages to its employees, it incurs certain payroll tax obligations. The ERTC comes into play here by providing a tax credit on a portion of these wages, thereby reducing the total employment taxes the business owes.

In essence, the ERTC works as a form of reimbursement. Let's say you're a business that qualifies for the ERTC. You continue to pay your employees as usual, but you claim the ERTC on your quarterly tax form at the end of the fiscal quarter. The IRS then processes this form and issues the credit applied against your payroll tax liability.

Suppose the credit awarded is more significant than your overall tax liability for that period. In that case, you receive a refund from the IRS for the difference - this is what is meant by the credit being 'fully refundable.' The credit can be claimed retroactively, allowing businesses to recover some of their costs from previous fiscal quarters.

While the ERTC benefits all businesses, it is particularly advantageous for industries like real estate with a mixture of full-time employees and independent contractors, as the credit calculation considers both types of workers. Therefore, the ERTC serves as a financial bolster for businesses, helping to promote employee retention, stabilize cash flow, and sustain operations during economically challenging times.

What Employers Are Qualified for the Employee Retention Tax Credit?

To be qualified for the Employee Retention Tax Credit (ERTC), you must fall within the range of employers recognized by the IRS. Here are the types of employers who can benefit from the ERTC:

Private Sector Businesses:

Regardless of size, any business operating in the private sector can apply for the ERTC, provided they meet the eligibility criteria for the pandemic's impact on their operations.

Tax-exempt Organizations:

Non-profit organizations, such as religious organizations like churches, are eligible. This category includes educational institutions, hospitals, and other healthcare organizations.

Governmental Entities:

Certain governmental entities can qualify for the ERTC. These include public universities, public hospitals, and federal credit unions.

Self-Employed Individuals:

Self-employed individuals can claim the ERTC for their employees rather than for their earnings.

Startups:

Businesses that started after February 15, 2020, which meet the eligibility criteria, can apply for the credit.

Agriculture and Horticulture Cooperatives:

Agricultural or horticultural cooperatives, taxed under Subchapter T of the Internal Revenue Code, can claim the ERTC.

Professional Employer Organizations (PEOs) or Certified Professional Employer Organizations (CPEOs):

These organizations can claim the ERTC on behalf of their clients if they are appropriately regarded as the employer or co-employer of the workers.

Tribal Governments:

Federally recognized Indian tribal governments can claim the ERTC for employees.

Remember that all employers who wish to claim the ERTC must demonstrate that they meet the specific criteria related to the impact of the COVID-19 pandemic on their business operations.

Common Industries that Qualify for ERC

The Employee Retention Credit (ERTC) is applicable across an array of industries that have experienced the economic brunt of the COVID-19 pandemic. Here are some common sectors that may qualify for ERTC:

Hospitality and Tourism:

This industry includes hotels, resorts, travel agencies, and other tourism-related businesses that have faced significant operational challenges due to travel restrictions and lockdowns.

Food Services:

Restaurants, cafes, caterers, and other businesses related to food services, which have been heavily impacted by closures and social distancing mandates, qualify for the ERTC.

Retail:

Brick-and-mortar retail stores, particularly those deemed non-essential during lockdowns, have faced steep foot traffic and sales declines, making them eligible for the ERTC.

Health and Fitness:

Fitness centers, yoga studios, and other health-related businesses that had to close or limit client interactions due to social distancing rules will likely qualify for the credit.

Events and Entertainment:

Businesses in the events and entertainment industry (event planners, concert venues, theaters, and similar establishments) that have seen a drastic decrease in circumstances due to gathering restrictions can apply for the ERTC.

Personal Care Services:

Salons, spas, and other personal care service providers, which have experienced significant disruptions due to closure mandates and reduced client volumes, are eligible for the ERTC.

Education:

Private education institutions, tutoring services, and other businesses in the education sector that the pandemic has economically impacted are potential candidates for the ERTC.

What Does Qualified Wages Mean for the Employee Retention Credit?

The qualified wages for the Employee Retention Tax Credit (ERTC) refer to the compensation paid to an employee during business operation disruption due to the COVID-19 pandemic. It covers all forms of remuneration, including cash payments and the cost of employer-provided qualified health plan expenses.

Different rules apply based on the employer's size. Qualified wages are those paid to employees when they are not performing services due to a COVID-19-related government order or a material drop in the employer's gross receipts for qualifying enterprises with more than 100 full-time employees.

For eligible employers having 100 or fewer full-time employees, all wages paid to employees throughout the economic disruption qualify for the tax credits, notwithstanding the employee providing services.

It's important to note that qualified wages do not include amounts paid under the Families First Coronavirus Response Act or amounts taken into account as payroll costs in connection with certain Small Business Administration loans under the CARES Act. These stipulations ensure that the same qualifying wages are only counted for one relief program.

Do you want to know more about ERC for realtors? Visit the ERTC Express website to learn more!