10 Things You Did not know ERC

10 Things You Did Not Know About The Employee Retention Credit (ERC)

1. The Employee Retention Credit (ERC) was originally established as part of the CARES Act in 2020 to provide financial relief to businesses impacted by the COVID-19 pandemic.
2. The ERC provides a tax credit of up to $7,000 per employee per quarter to eligible employers who continue to pay their employees during the pandemic.
3. Eligible employers can claim the ERC for wages paid between March 13, 2020, and December 31, 2021, and the credit has been extended through June 30, 2022, by the American Rescue Plan Act.
4. The ERC can be claimed in addition to other COVID-19 relief programs, such as the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL).
5. Employers who received a PPP loan can still qualify for the ERC, but they cannot claim the credit for wages paid with PPP funds.
6. The ERC can be claimed for both full-time and part-time employees, as well as certain types of health insurance costs.
7. Eligible employers include those whose business operations were fully or partially suspended due to a government order related to COVID-19 or those who experienced a significant decline in gross receipts.
8. The ERC is refundable, meaning that if the credit exceeds the employer’s payroll tax liability, they can receive a refund for the excess amount.
9. Employers can claim the ERC on their quarterly employment tax returns, and the credit can be applied against both the employer’s share of Social Security taxes and the employer’s share of Medicare taxes.
10. The IRS has issued guidance and FAQs to help employers determine their eligibility for the ERC and to answer questions about claiming the credit.

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