What is Employee Retention Tax Credit?
ERC is a government stimulus program designed to help those businesses that were able to retain their employee during the Covid-19 pandemic
Established by the CARES ACT, it is a refundable tax credit- a grant, not a loan- that you can claim for your business. The ERC is available to both small and mid-sized businesses. It is based on qualified wages and healthcare paid to employees.
Established by the CARES ACT, it is a refundable tax credit- a grant, not a loan- that you can claim for your business. The ERC is available to both small and mid-sized businesses. It is based on qualified wages and healthcare paid to employees.
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Up to $26,000 per employee
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Available for 2020 to 2021
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No limit funding
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Qualify with decreased revenue or partial/full shutdown of business operations
How do you know if a business is elegible?
To qualify must have been negatively impacted in either of the following ways:
- A government authority required partial or full shutdown of your business during 2020 or 202. This includes your operations being limited by commerce, inability to travel, change in employee workload or inability to conduct group meetings
- Gross receipt reduction criteria is different for 2020 (50% loss vs 2029) and 2021 ( 20% loss vs 2029 but is a measured against the current quarters as compared to 2019 pre-COVID amounts.
- A business can be eligible for one quarter and not another.
- Initially, under the CARES Act of 2020, businesses were not able to qualify for the ERC if they had already received a Paycheck Protection Program (PPP) loan. With new legislation in 2021, employers are now eligible for both programs. The ERC, tough, cannot apply to the same wages as the ones for PPP.
