Clarus Helps Businesses Unlock Value of Tax Incentive Programs in 2021

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Clarus Reveals Top Tips and Impressive Growth

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With our approach, the hurdles are removed and the process is automated to ensure companies can continue to innovate and grow despite the downturn.

Congress recently passed the Consolidated Appropriations Act, 2021, which delivers $900 billion in stimulus relief, including phase two of the Paycheck Protection Program (PPP). While government support is critical for businesses during the ongoing COVID-19 pandemic, it is also complex and time-consuming for companies to manage. In fact, a recent study found that PPP forgiveness applications can take small and midsize (SMB) owners up to 15 hours to complete. That is why, today, Clarus, the leader in world-class technology that enables every business to unlock the full value of tax incentives for innovation and growth, is revealing top tips to help all businesses navigate tax incentive programs in the year ahead.

“During this time of economic uncertainty, the federal government continues to evaluate options for supporting employers during the COVID-19 pandemic - but unfortunately, many business owners find the process to be cumbersome and therefore, don’t always take advantage of the programs intended to help them,” said Brent Johnson, co-founder of Clarus. “With our approach, the hurdles are removed and the process is automated to ensure companies can continue to innovate and grow despite the downturn. Beyond the current situation, there are many other incentive programs available, and our focus is on making sure every business can access federal and state dollars - and not just those large corporations with tax experts on retainers.”

Clarus, which monitors more than 60 state and federal tax incentive programs, has experienced explosive growth in 2020, including increasing revenue by 60 percent Year-over-Year, growing its team by 15 percent and helping companies secure more than $65MM in incentive dollars.

Since SMBs account for more than 1.5 million jobs annually and drive about 44 percent of U.S. economic activity. Clarus is revealing its top five takeaways to help more organizations navigate and leverage government programs in 2021.

Government Incentives 101: Incentives are primarily targeted towards organizations:

  • investing in new technology or product development
  • growing their employment levels
  • retaining jobs (for businesses experiencing a downturn)
  • making capital investments

If your business fits one of those criteria you should consider what government incentives are available to your organization.

COVID-19 and Stimulus Programs: The 2020 CARES act established two significant new incentive programs for employers: The Paycheck Protection Program (PPP) and the Employee Retention Tax Credit (ERTC) program. Although the Paycheck Protection Program received a significant amount of press, the Employee Retention Tax Credit program is a program that is often missed.

New this year - the Consolidated Appropriations Act, 2021 extended and enhanced both the PPP and the ERTC program. These two programs will again be significant opportunities in 2021 for employers who were harmed by the current pandemic.

PPP and ERTC used together: In December, Congress removed a restriction originally contained in the CARES Act that prevented employers from taking the PPP loan and claiming an Employee Retention Tax Credit. This creates a look-back opportunity for businesses which meet the eligibility requirements of the ERTC.

Incentives for Not-for-Profit Employers: In 2020, employment-based incentives like the Paycheck Protection Program, Employee Retention Tax Credit and Work Opportunity Tax Credit were made available to hospitals, churches and other not-for-profit organizations that are also employers. Hurdles have been removed to better support all employers in 2021, including those that don't file income taxes.

2021 Planning: During 2020 Congress approved two stimulus packages that contained unheard of economics for large and small employers. President Biden has already proposed a 1.9 trillion dollar package. Congress will continue to make changes and enhancements to these programs for employers. Optimizing your participation will require the following:

  • Establish a baseline - Key metrics required to participate are pre-pandemic employment levels and revenue. Don’t miss the statutorily defined cutoffs if you are close.
  • Stay connected to what’s going on in Congress, these programs continue to change
  • Be prepared to move quickly, some programs have funding caps

“When you’re a growing company, you don’t always have the knowledge or time to take advantage of government incentive programs; however, the support of Clarus and its platform helped us improve our cashflow and ultimately, scale more efficiently,” said Jeffrey Wilkins, CEO of FMX, the leading provider of maintenance management solutions that help organizations accelerate operational excellence. “Clarus made the entire process simple and in today’s landscape, all businesses need the insight and automation to leverage every bit of available support.”

For more information about Clarus and its solutions, please visit claruscredits.com.

About Clarus
Clarus is the leader in world-class technology that enables every business to unlock the full value of tax incentives for innovation and growth. Founded by tax and technology experts, Clarus builds cloud-based software to deliver access, compliance, and clarity for federal and state programs. With Clarus, companies of all sizes can realize and optimize the power of government programs to materially impact their business. For more information, visit claruscredits.com.

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Aimee Eichelberger
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