What is the Employee Retention Credit (ERC)

The ERC is a refundable payroll tax credit that is eligible for businesses as a 2020 retroactive credit and a 2021 current credit. Businesses that experienced a loss in revenues or a suspension in business may be eligible for up to $33,000* per employee from the federal Employee Retention Credit program.

Until late 2020, employers who had taken a PPP loan could not use the ERC. The major change resulting from the most recent legislation allows these employers who took PPP loans to take the employee retention credit, so long as the same wages are not used for both. This knowledge gap is preventing many businesses from pursuing the ERC.

Am I eligible?

Businesses can qualify for a refundable tax credit of $5,000 per employee in 2020 and up to $28,000 per employee in 2021 by meeting any one of these three qualification criteria:

Full or partial business suspension due to a Covid-19 government order.

OR

20% Revenue decline in any quarter of 2021 when compared to the same quarter in 2019.

OR

50% Revenue decline in any quarter of 2020 when compared to the same quarter in 2019.

*Combined maximum credit per employee 2020 and 2021

Let Incentax help you realize the maximum credit you are eligible for.

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