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Home Research Up To $400 Billion Available To Small Businesses Through The Employee Retention Credit
Small businesses looking for an infusion of cash could benefit from up to $400 billion in refundable tax credits through the Employee Retention Credit program based on a Lendio analysis of internal and SBA data. Signed into law as part of the CARES Act to provide relief during the COVID-19 pandemic, the Employee Retention Credit allows qualifying small businesses who retained W-2 employees throughout 2020-2021, to claim up to $26,000 per W-2 employee.
On average businesses that apply through Lendio receive $74,000 through the ERC. Qualified businesses with less than two W-2 employees average $13,000, and companies with 25+ W-2 employees average $302,000.
Based purely on the number of small businesses and the number of W-2 employees at those businesses the highest potential amount totals up to $1.5 trillion, but after going through complex qualification criteria, businesses get, on average, $7,000 per W-2 employee out of the maximum $26,000.
Full qualification requirements include:
2020 qualifications:
2021 qualifications:
By combining SBA data on:
With Lendio data on the typical credit amount small businesses qualify for, Lendio found the potential dollar amount available to SMBs in each state.
While Lendio’s analysis found potential money available largely aligns with the population of each state, certain states and industries are more likely to have businesses who qualify for the Employee Retention Credit based on the number of government mandates that impacted businesses and how broadly pandemic precautions impacted certain industries.
Businesses in the following states are most likely to qualify for the Employee Retention Credit based on being above average in the following variables:
The following industries are most likely to qualify for the Employee Retention Credit based on being above average in the following variables:
Recent news around ‘ERC Mills’ taking advantage of small businesses is a great reminder to all small business owners to work with reputable companies when filing their tax credit. Lendio has been supporting small businesses for over a decade and has facilitated more than 350,000 small business loans in addition to facilitating more than $10 billion in PPP loan and ERC approvals as part of government COVID-19/CARES Act relief.
The qualification criteria for the ERC have evolved over time. Credible ERC professionals can help you navigate these details and maximize your refund.
If you are qualifying due to a full or partial suspension rather than a decline in gross receipts, providing detailed documentation of how your business was impacted by a government order is key to ensuring your application is approved.
If in doubt about whether you’ll qualify for the money, still apply for free. You may be surprised by what you can qualify for.
Lendio Proprietary Data
ERC Pros Proprietary Data
2020 SBA state profiles
2021 SBA state profiles
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