What is the Employee Retention Tax Credit?
The ERC Program is one of the most powerful and paramount government aid programs to ever exist for US businesses. The employee retention credit is a stimulus program for businesses established by the CARES Act, and sponsored by the IRS.
The goal of this program is to reward businesses that retained their W2 Payroll employees during the Covid-19 pandemic (2020 and 2021) and continued paying their Payroll Taxes. Because this was a very difficult time for our nation, the US government is basically saying “Thank you” to business owners.
Businesses that retained their W2 Payroll employees during the Covid-19 pandemic can receive up to $26,000 per employee. ERC is a refundable tax credit – a grant, not a loan – that businesses can claim through an ERC filing process.
who qualifies for the ERC
The ERC program was created for small-medium businesses that have faced economic hardship or have had to make changes in the standard business operations due to Covid-19 government mandates. Employers who showed a decline in revenue, changes or adjustments in standard business operations, or partial/full business suspension during the Covid-19 pandemic and continued to pay employees on W2 payroll during the years 2020 and 2021.
Qualified wages are wages paid, including health care costs, to the employee whether or not the employee is performing services. The credit can be claimed on all qualified wages. Companies looking to claim the ERTC must report their total qualified wages, as well as the related health insurance costs, on their quarterly tax returns (Form 941 for most employers).
Do you have to pay back the employee retention credit?
The answer is no this is a refund just like a grant.
How to file for the ERC (employee retention credit)
This is as simple as a phone call to get started
