The Employee Retention Credit (ERC) has been a lifeline for many businesses struggling to survive during the COVID-19 pandemic. While most companies know the credit, many do not realize it is available to manufacturing industries, including food and beverage production. The ERC can provide significant savings to eligible businesses and can help to boost their recovery.
Understanding the ERC for Manufacturing
Manufacturing businesses have been hit hard by the pandemic, with many experiencing decreased demand, supply chain disruptions, and employee safety concerns. The ERC can provide financial relief to eligible businesses, including those in the food and beverage production industry. The credit can be claimed for wages paid from March 13, 2020, through December 31, 2021, and can provide up to $33,000 per employee in refundable tax credits.
Eligibility for the ERC for Manufacturing
To be eligible for the ERC, manufacturing businesses must meet specific criteria. First, the business must have experienced either a full or partial suspension of operations due to a government order or a significant decline in gross receipts. Second, the business must have fewer than 500 full-time employees. Third, the business must have paid wages during the eligible period.
Benefits of the ERC for Manufacturing
The ERC can provide significant savings to eligible manufacturing businesses. For example, a business that paid $200,000 in wages to eligible employees in 2020 could claim a credit of up to $40,000. The credit can be applied against federal payroll taxes, including the employer’s share of Social Security and Medicare taxes. Any excess credit can be refunded to the business.
How to Claim the ERC for Manufacturing
Manufacturing businesses can claim the ERC by filing Form 941, Employer’s Quarterly Federal Tax Return, with the IRS. The credit is claimed on Line 11c of the form for the eligible quarters. Alternatively, businesses can file an amended Form 941-X for the eligible quarters. The credit can also be claimed on Form 7200, Advance Payment of Employer Credits Due to COVID-19.
How We Can Help
If you are a manufacturing business, including food and beverage production, and have yet to claim the ERC, now is the time. The ERC can provide significant savings and help to boost your business’s recovery from the pandemic. GetMyBizRefund can help you navigate the ERC’s complex rules and regulations and maximize your business savings. Contact us today to learn more about how we can help you claim the manufacturing ERC.