What Is ERC?
The Employee Retention Credit (ERC) is a fully refundable tax credit enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to assist employers affected by pandemic-related shutdowns and restrictions.
Eligible businesses can claim an Employee Retention Tax Credit (ERTC) on their qualified wages. ERC grants were extended until the end of 2021 as part of the American Rescue Plan Act (ARPA) of 2021 and will expire in 2023. For all quarters in 2020, the deadline to apply for the ERC refund is April 15, 2024, and for all quarters in 2021, the deadline is April 15, 2025
Apply now while it’s still available and recover up to $26,000 ERC refund per employee.
What Is ERC: Everything You Need to Know
The Employee Retention Tax Credit is a payroll tax incentive designed for businesses that:
- Kept employees on payroll while shut down due to the COVID-19 pandemic
- Had a significant gross receipts reduction from March 13, 2020 to December 31, 2021
- Qualified as a recovery startup business for the third or fourth quarters of 2021
- Experienced supply chain disruptions that caused an impact of 10% or more on the business
- Previously received or will receive a Paycheck Protection Program (PPP) loan
If you believe your business may qualify for ERC grants, we’re here to help you. Contact us today to determine your ERC refund eligibility.
How Much Is the Tax Credit Worth?
The Employee Retention Tax Credit was expanded significantly for the 2021 tax year.
Under the CARES Act of 2020, qualified employers, including those who took a loan under the initial PPP, can claim a 50% ERC refund on qualified wages paid between March 15 and December 31, 2020. The maximum credit is $5,000 per employee.
Under the Consolidated Appropriations Act (CAA) of 2021, the ERC grants are equal to 70% of eligible employee wages. The maximum credit is $21,000 per employee ($7,000 per quarter).
Once you’ve filed your claim, the Internal Revenue Service (IRS) has stipulated a 20-week minimum turnaround on the ERC refunds.
Have more questions about what is ERC and how it works? Get in touch with us now. We’re more than happy to answer your questions and assist you.