Skip to the main content.

1 min read

Employee Retention Credit (ERC)—You Might Still Qualify

Employee Retention Credit (ERC)—You Might Still Qualify

Did you know that you might still qualify for the Employee Retention Credit? Find out what it is and whether you qualify in this helpful post.

Employee Retention Credit—what is it?

Simply put, the Employee Retention Credit, or more commonly referred to as ERC, is a payroll tax credit to business owners for their efforts to keep their employees on payroll during the pandemic.  

ERC was introduced by the CARES ACT in 2020, expanded under the Consolidated Appropriations Act of 2021 (CAA), and later extended under the America Rescue Plan Act of 2021 (ARPA). The Employee Retention Credit is one of the most lucrative relief programs owners can take advantage of as we work towards leaving this pandemic behind us. 

Do you qualify?

If your business operations were either fully or partially suspended due to a COVID-19-related governmental order, or if you experienced a significant reduction in gross receipts, you may qualify for the employee retention credit. This credit is available to essential and non-essential businesses in any industry and can be claimed through the end of 2021. 

 

the power and security of cloud-based accounting

 

For how much?

Recently, the ERC rate increased from 50% to 70% of qualified wages and the limit on per-employee wages increased from $10,000 for the year to $10,000 per quarter. This means you could be eligible to receive $5,000 per employee for 2020, and $7,000 per employee, per quarter, for 2021. That is a significant sum for certain businesses.  

Employers that received a Paycheck Protection Program (PPP) loan, but were previously prohibited from claiming the ERC, may now qualify and can retroactively claim the ERC for 2020—but you can’t double-dip, so to speak. You’ll need to clarify which wages were covered by PPP and which wages are being applied to the credit.  

Due to the complexity of the program and the rule changes between 2020 and 2021, it is highly recommended that you work with an expert to claim the credit on your employment taxes. If you’ve already filed your tax returns for 2020, don’t worry—you can still go back and claim the credit. Contact us today and together we can discuss your options. 

What you need to know about the Employee Retention Credit in 2022

4 min read

What you need to know about the Employee Retention Credit in 2022

The Coronovirus Aid, Relief, and Economic Security (CARES) Act contains a business relief provision known as the Employee Retention Credit (ERC), a...

Read More

1 min read

Employer Tax Credit for Paid Family and Medical Leave

As a small business owner, there’s a lot to manage and frankly, it can be daunting. The Family and Medical Leave Act (FMLA) and all...

Read More
Are You Overlooking These 7 Key Payroll Data Metrics?

3 min read

Are You Overlooking These 7 Key Payroll Data Metrics?

As your employee pool grows, so too will the need to have efficient payroll processes. However, as you may well know, payroll professionals are...

Read More