Was Your Business Negatively Impacted during the Covid-19 Pandemic relating to a decrease in revenue?

EMPLOYEE RETENTION CREDIT

What is the ERC?

ERC is a stimulus program designed to help those businesses that were able to retain their employees during the Covid-19 pandemic.

Established by the CARES Act, it is a refundable tax credit – 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, the Employee Retention Credit is a tax credit created by the U.S. Government to encourage and reward businesses who retained employees during COVID-19 shutdowns and slowdowns.

• Up to $26,000 per employee
• No limit on funding
• ERC is a payroll tax refund (not a loan)

• After March 12, 2020 and before January 1, 2021 – Notice 2021-20, Notice 2021-49 PDF and Revenue Procedure 2021-33 PDF
• After December 31, 2020 and before July 1, 2021 – Notice 2021-23 PDF, Notice 2021-49 PDF and Revenue Procedure 2021-33 PDF
• After June 30, 2021 and before October 1, 2021 – Notice 2021-49 PDF and Revenue Procedure 2021-33 PDF
• After September 30, 2021 and before January 1, 2022 – Notice 2021-49 PDF and Notice 2021-65 PDF

These FAQs do not reflect the changes made by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act), enacted December 27, 2020, the American Rescue Plan Act of 2021 (ARP Act), enacted March 11, 2021, or the Infrastructure Investment and Jobs Act (Infrastructure Act), enacted November 15, 2021. The Relief Act amended and extended the employee retention credit (and the availability of certain advance payments of the tax credits) under section 2301 of the CARES Act for the first and second calendar quarters of 2021. The ARP Act modified and extended the employee retention credit for the third and fourth quarters of 2021. The Infrastructure Act terminated the employee retention credit for wages paid in the fourth quarter of 2021 for employers that are not recovery startup businesses.

The Employee Retention Credit under the CARES Act encourages businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

Frequently Asked Questions

• General Information
• Determining Which Employers are Eligible to Claim the Employee Retention Credit
• Determining Which Entities are Considered a Single Employer Under the Aggregation Rules
• Determining What Types of Governmental Orders Related to COVID-19 May be Taken into Account for Purposes of the Employee Retention Credit
• Determining When an Employer’s Trade or Business Operations are Considered to be Fully or Partially Suspended Due to a Governmental Order
• Determining When an Employer is Considered to have a Significant Decline in Gross Receipts
• Determining the Maximum Amount of an Eligible Employer’s Employee Retention Credit
• Determining Qualified Wages
• Determining the Amount of Allocable Qualified Health Plan Expenses
• How to Claim the Employee Retention Credit
• Interaction with Other Credit and Relief Provisions
• Special Issues for Employees: Income and Deduction
• Special Issues for Employers: Income and Deduction
• Special Issues for Employers: Use of Third Party Payers
• Other Issues

Where can I get more information?

• Employee Retention Credit
• Coronavirus Tax Relief
• New Employer Tax Credits
• Department of Labor's COVID-19 and the American Workplace
• Small Business Administration’s Paycheck Protection Program

https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act