Bottom Line Concepts

About The ERC Program: What is the Employee Retention Credit (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 – a grant, not a loan – that you can claim for your business. The ERC is available to both small and mid-sized companies. It is based on qualified wages and healthcare paid to employees- Up to per employee - Available for 2020 and the first three quarters of 2021 - Qualify with decreased revenue or COVID event - No limit on funding - ERC is a refundable tax credit How much money can you get back? You can claim up to per employee for 2020. For 2021, the credit can be up to per employee per quarter. How do you know if your business is eligible? To qualify, your business must have been negatively impacted in either of the following ways: A government authority requires a partial or complete shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel or restrictions of group meetings. Gross receipt reduction criteria are different for 2020 and 2021 but are measured against the current quarter compared to 2019 pre-COVID amounts. A business can be eligible for one quarter and not another. Initially, under the CARES Act of 2020, businesses could not qualify for the ERC if they had already received a Paycheck Protection Program loan. With new legislation in 2021, employers are now eligible for both programs. The ERC, though, cannot apply to the same wages as the ones for Why Us? The ERC underwent several changes and had many technical details, including determining qualified wages, which employees are eligible, and more. As a result, your business’ specific case might require a more intensive review and analysis. The program is complex and might leave you with many unanswered questions.