When it comes to taxes, employees often have questions about what wages are deductible. One type of wage that is commonly asked about is ERTC wages, or Employer Retention Tax Credit wages.
ERTC wages are those that are paid to employees during the COVID-19 pandemic who are unable to work due to the business being partially or fully closed, or experiencing a significant decline in gross receipts. These wages are eligible for the Employer Retention Tax Credit, which is a tax credit that is available to employers who continue to pay their employees during this time of economic hardship.
But are ERTC wages deductible for the employee? The answer is no. ERTC wages are not deductible for the employee on their personal tax return. The tax credit is only available to the employer, not to the employee.
However, there may be other deductions that the employee can claim on their personal tax return. For example, if the employee paid for qualified work-related expenses out of their own pocket, such as the cost of a home office or supplies for their job, they may be able to claim those expenses as deductions.
It is important for employees to keep track of any expenses they incur related to their job, as they may be able to claim them on their personal tax return. Employers should also be aware of the ERTC and its rules, as it can provide significant tax savings for their business.
In conclusion, ERTC wages are not deductible for the employee on their personal tax return. However, employees may be able to claim other deductions related to their job. Employers should be aware of the ERTC and its rules in order to take advantage of the tax credit and save on their taxes.