What Do CPA Firms Near Me Know About COVID Tax Breaks?

The federal government has just released even more information regarding financial flexibility plans for businesses. This time they’ve released information on new COVID-19 tax credits. If you’re looking for “CPA firms near me” that can give advice on COVID-19 tax breaks, you’ve come to the right place. Perry & Associates has a team of professionals that are daily staying current on COVID related news and updates. Here’s a quick description of the tax credits currently available.

Employee Retention Credit

In an effort to avoid mass layoffs and economic uncertainty, the federal government is offering tax breaks to businesses who retain employees during the shutdown. According to the IRS, “The refundable tax credit is 50% of up to $10,000 in wages” for employees kept on payroll. This applies to any business that has been financially impacted by the COVID-19 pandemic.
Your business has been financially impacted by the COVID-19 pandemic if:

  • Your business operations were restricted to some degree by a government order
  • Your 2020 quarterly gross receipts are below 50% of a comparable quarter from 2019

If you are a small business that has taken a small business loan, you will not be eligible for this Employee Retention Credit. State and local governments are also excluded from participating.
Because this tax credit requires careful accounting and reporting each quarter, we recommend you do your due diligence. Do a search for “cpa firms near me” and find a firm that will handle your accounting and reporting with high attention to detail.

Paid Sick Leave Credit

The Paid Sick Leave Credit and Family Leave Credit is aimed at promoting self-quarantine and sick leave during the COVID-19 crisis. The federal government wants to encourage business owners and managers to support workers who choose to stay home due to fever and other symptoms. This will keep the rate of viral transmission low.
The IRS says that, “Employees are entitled to paid sick leave for up to 10 days (up to 80 hours) at the employee’s regular rate of pay up to $511 per day and $5,110 in total.”
In addition, your business can receive tax credits for COVID-19 caregivers. Sick leave applies to employees who take off time to care for:

  • someone else with Coronavirus
  • a child whose school, place of care, or childcare provider has become unavailable.

Qualifying employees can receive paid sick leave for up to two weeks (up to 80 hours) at 2/3 the employee’s regular rate of pay or up to $200 per day and $2,000 in total.

Family Leave Credit

Under the unique conditions of COVID-19, employees are additionally entitled to paid family and medical leave equal to:

  • 2/3 of the employee’s regular pay
  • up to $200 per day and $10,000 in total.

Employers can apply up to 10 weeks of qualifying leave towards the family leave credit.

Receiving the Paid Sick Leave and Family Leave Credits

Employers don’t have to wait for a deposit or reimbursement on their annual taxes to take advantage of these credits. You can receive your credit by deducting the taxable amounts from your quarterly tax payments. This applies to the period of April 1, 2020, through December 31, 2020.

Help from CPA Firms Near You

Perry & Associates CPAs are ready to help. Contact us if you are unsure about what wages and sick leave items to claim as tax credits. Most importantly, work with us to make sure you’re receiving the largest tax credit available.
Perry & Associates CPAs has 5 offices throughout Southeast Ohio and nearby West Virginia. Search for one of our CPA firms near you.