ERC: Employee Retention Credit

ERC a government program designed to help businesses that were affected by the COVID-19 pandemic. Final deadline for amendments is April 2025 and must be submitted directly to the IRS.

 The credit is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before January 1, 2022. Eligibility and credit amount vary depending on when the business impacts occurred.  

Generally, businesses and tax-exempt organizations that qualify are those that were shut down by a government order due to the COVID-19 pandemic during 2020 or the first three calendar quarters of 2021.

The business owner can receive up to $26,000 (5k-7k per employee per eligible quarter). IRS refund is issued as a check or credit towards future payroll tax payments.

 Certain limitations apply to the ERC. For example, employers cannot claim the ERC on wages that were reported as payroll costs for Paycheck Protection Program loan forgiveness.