Employee Retention Credit – Minnesota Eligibility

Are you a business owner looking for more info, on the Employee Retention Credit eligibility requirements in Minnesota? Finding out if you qualify may not be as difficult as you think. This article is designed to clarify ERC specifics, as they apply in the Land of 10,000 Lakes. Whether your business is in healthcare, technology, or agriculture. This write-up offers valuable insights. Read on to discover, how you could substantially reduce your payroll costs with this credit.

Do I Qualify for the MN Employee Retention Credit?

Qualifying for the ERC in Minnesota aligns closely with federal stipulations. You must fulfill one of two criteria:

• A notable decrease in gross receipts
• Government-mandated partial or complete business closure

Furthermore, you should have:

• A minimum of two W-2 employees in any fiscal quarter

For the year 2020. Employers needed to show a quarterly drop of 50% in gross income, to be eligible for a maximum of $5,000 per worker. However in 2021, this qualifying reduction was lowered to 20%. Allowing businesses to claim as much as $7,000, for each employee every quarter. Despite what many think, under most circumstances, you can actually file for these credits retroactively. So understanding the updated guidelines is crucial for maximizing your benefits. ^{(1, 2)}

Services Available to Help Minnesota Businesses Apply for ERC

Don’t navigate the ERC application labyrinth alone. Fundwise’s service is available to help streamline the process. Simply apply online, inputting details such as;

• Your name
• Business name
• Number of W2 employees

Fundwise then calculates your potential ERC amount. Their team of experts handle all the IRS paperwork, ensuring you receive funds directly from the IRS. Fundwise’s fee structure is performance-based, providing you value for your money.

How Does the ERC Interact with Other Minnesota Tax Credits?

The Employee Retention Credit (ERC), can work in conjunction with a range of other financial incentives, specific to the state of Minnesota. For example;

• The Angel Tax Credit: Is designed to encourage investments in startup companies.
• The Job Creation Fund: Provides financial support to businesses, that are creating new jobs and investing in their infrastructure.
• The Innovation Voucher Program: Which assists small businesses in purchasing technical assistance and services.
• The Minnesota Investment Fund: Which offers loans to companies, that aim to expand and retain jobs within the state.

While Minnesota regularly revises and introduces new elements to these programs. Staying updated on state announcements, is crucial for maximizing these benefits. This dynamic approach allows businesses multiple opportunities, for financial relief and growth. Making it essential, for companies to keep a finger on the pulse, of the state’s ever-evolving financial incentive landscape.

*Please note, you are allowed to also claim the Angel Tax Credit, Job Creation Fund, WOTC etc. On the condition that the wages utilized for determining these payouts. Are not simultaneously used for calculating the Employee Retention Credit (ERC). ⁽³⁾

More Details About Minnesota (MN)

• Approximately one-third of the state is forested. Earning it the nickname “Land of 10,000 Lakes”. This is due to its more than 14,000 freshwater bodies, that each span at least ten acres.
• In 2008, state and local taxes consumed 10.2% of Minnesotans’ income. Placing it slightly above the national average of 9.7%.
• The economic backbone of Minnesota has evolved since the late 1900s. Moving away from its roots in agriculture and natural resource extraction. To a focus on sectors such as; services, financial institutions, and healthcare. ^{(4, 5, 6)}

Conclusion

If you’re a Minnesota business owner, striving to overcome financial hurdles while retaining your staff. The ERC is an opportunity you shouldn’t overlook. With the potential for significant savings per employee, it’s an invaluable resource in these challenging times. For more details on your eligibility. Feel free to get in contact, as Fundwise is here to help guide you through each step of the application process.

FAQ

1. How Do I Claim the ERC?

To claim the ERC, employers must file the appropriate IRS forms along with their tax return (or adjust a previously submitted return). Certain agents authorized by a valid Power of Attorney, can also sign a claim for refund on behalf of the employer.

2. Can the ERC Be Combined with the Paycheck Protection Program (PPP)?

At first, companies with PPP loans couldn’t qualify for the Employee Retention Credit. However, with the passage of the Consolidated Appropriations Act in 2021. Businesses that got a PPP loan can now retroactively apply for the ERC, going back to 2020. It’s important to remember though. Wages paid using forgiven PPP loan funds, can’t be used to claim the ERC.

To read more FAQ questions, click here.

Click here to jump back to the homepage. Or, gain more insight on adjacent states, when you read the Employee Retention Credit Michigan application process.

Last reviewed September 2023