Employee Retention Credit (ERC) is a tax credit against certain payroll taxes, including an employer's share of social security taxes for wages paid between March 12, 2020 and December 31, 2020. The tax credit is 50% of the wages paid up to $10,000 per employee, capped at $5,000 per employee. If the amount of the tax credit for an employer is more than the amount of the employer's share of social security tax owed,the excess is refunded – paid – directly to the employer.
The ERC is a refundable payroll tax credit for wages and health plan expenses paid or incurred by an employer whose operations were either fully or partially suspended due to a COVID-19-related governmental order or where the employer experienced a significant reduction in gross receipts. ERC eligibility period to December 31, 2021, increased the ERC rate from 50% to 70% of qualified wages and increased the limit on per-employee wages from $10,000 for the year to $10,000 per quarter ($50,000 per quarter for start-up businesses). In addition, employers that received a PPP loan and were previously prohibited from claiming the ERC may now qualify and can retroactively claim the ERC for 2020.
Contact me for a complimentary consultation to determine if your company qualifies, credit could as much as $33,000 in tax credit per full-time employee.