Iowa small business owner explains the benefits of the ERTC and the impact of its abrupt and retroactive termination on small business
WASHINGTON, D.C. (Nov. 22, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released a new video featuring Jerry Akers, a small business owner in Iowa, explaining how his business planned its financial year around the Employee Retention Tax Credit and was negatively impacted by the unexpected cancellation of the credit during the fourth quarter of 2021.
The Employee Retention Tax Credit (ERTC) was created in 2020 to aid small businesses during the COVID-19 pandemic by offering small businesses a tax credit to offset the cost of payroll taxes on employees, thereby enabling small businesses throughout the country to keep their workers employed. Originally, the ERTC was set to expire on January 1, 2022, allowing employers to claim the tax credit for all four quarters of 2021. Unfortunately, on November 15, 2021, the Infrastructure Investment and Jobs Act retroactively moved the ERTC expiration date to October 1, 2021, terminating the fourth quarter tax credit that so many small businesses had been depending on.
Akers explains: “We saw [the ERTC] as a real opportunity to solidify the lives that our employees were leading and make sure they were well taken care of. So, we based everything we were going to do moving forward on using the ERTC to bring back our employees to full time status, to give them raises so that they were making an increased income, and to increase their benefits. So, the ERTC was exceptionally powerful in saving our business, of course, but also in enhancing the lives of the 200 employees, many of whom are single moms, that were depending on our company for employment…My message to Congress regarding ERTC would be twofold. Number one: Thank you. The ERTC allowed us to take much better care of our employees during a very difficult time, enhancing their pay as well as their benefits, and improving the lives of their families…The other side of that, of course, is: you simply cannot make promises to the American public, in particular business owners, and then at the last moment pull them back.”
According to NFIB’s March COVID-19 Small Business Survey, a fifth of small employers claimed the ERTC for wages in 2020, and another 18% claimed the ERTC for wages in 2021.
You can view the new video here:
Small Business Owner Explains ERTC Benefits and Needed Improvements from NFIB Video on Vimeo.
