It’s time to talk about the difference between the PPP and the ERTC programs!
Christine Till
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The Paycheck Protection Program (PPP) and the Employee Retention Tax Credit (ERTC) are two of the most important parts of the Covid-19 Relief Fund.
But what’s the difference between the two?
The PPP is a loan program that helps businesses with W-2 employees cover payroll costs, health care costs, and other expenses during the pandemic.
The loan is forgivable if the business uses the loan to cover the listed expenses.
The loan is also available to self-employed individuals and independent contractors.
The ERTC, on the other hand, is a tax credit available to businesses that have experienced a significant decline in revenue due to the pandemic.
The credit is equal to 50% of up to $10,000 in wages paid per employee, for a total of up to $5,000 per employee. The credit is also available to self-employed individuals and independent contractors.
So which one is better for businesses with W-2 employees?
That depends on the business’s situation.
The PPP provides more immediate relief, and the loan is forgivable if used for the right expenses.
The ERTC, however, can provide up to $26,000 per employee in tax credits, which may be more beneficial in the long run.
In the end, it’s important to understand the differences between the PPP and the ERTC programs so that businesses can make the best decision for their own unique situation.
Both programs are important parts of the Covid-19 Relief Fund, and they can be used to help businesses with W-2 employees get through this difficult time.
The credit is available to businesses that have experienced a decline in gross receipts of at least 50% compared to the same quarter in the previous year.
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The credit is also available to employers that have experienced a drastic change in operations due to government orders related to COVID-19.
The ERTC is a great program for businesses that have had to reduce the number of hours their employees work or that have had to furlough employees due to the pandemic.
The maximum credit is $26,000 per employee, which is much higher than the maximum available from the PPP loan program.
So, if you’re a business with W-2 employees and you’ve been affected by COVID-19, the ERTC could be a great option for you. It could provide you with much-needed relief and could help you keep your employees on the payroll.
Don’t forget to check out the ERTC program and see if it is right for your business.
Cheering your success!
Christine Till