Employee Retention Tax Credit
Employee Retention Tax Credit (ERC)
The Employee Retention Credit (ERC) was established during the COVID-19 crisis in 2020 to help alleviate the stress and pressure of business owners by offering eligible employers a refundable tax credit. This was to incentivize small businesses to keep employees on their payroll during the pandemic.
The credit they offer is a refundable employment tax credit up to $5,000 per employee for 2020, and up to $7,000 per employee for the 1st, 2nd, and 3rd quarter in 2021. Employers could receive a tax refund check up to $26,000 per employee if credit was maximized for both 2020 and 2021. Businesses can claim the ERC now, but it will begin to expire on April 15, 2024.
You may be eligible for 2020 ERC if:
✔ Your business was partially or totally shutdown as a result of a COVID-19 federal, state, or local government order OR
✔ Your business revenue dropped by 50% or more in any quarter of 2020 compared to the same quarter in 2019.
You may be eligible for the 2021 ERC if:
✔ Your business was partially or totally shutdown during any of the first three calendar quarters as a result of a COVID-19 federal, state, or local government order OR
✔ Your business revenue dropped by 20% or more in any of the first three calendar quarters of 2021 compared to the same quarter in 2019.
Navigating through all the details to see if you qualify can be overwhelming, but we’re here to help. If you have not yet determined your eligibility for the ERC credit yet, please contact us today.