![]() ![]() It was created by the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act. The Employee Retention Credit (ERC) was a refundable payroll tax credit originally for “qualified wages” paid to retained employees from March 13, 2020, to Dec. Understanding the Employee Retention Credit (ERC) Eligibility for the Employee Retention Credit is determined by specific criteria. Passage of the Infrastructure Investment and Jobs Act (IIJA) retroactively eliminated the ERC for most businesses after Sept.The American Rescue Plan Act of 2021 (ARPA) extended coverage to include wages paid between July 1, 2021, and Dec. In March 2021, the Treasury Department issued Notice 2021-20 and Notice 2021-23, providing formal guidance relating to Employee Retention Credits (ERCs), replacing pre-existing FAQs first issued in May 2020 and updated periodically, with the last update having been made January 2021.The Consolidated Appropriations Act, 2021 (CAA) extended the ERC to include wages paid before Jand expanded the maximum ERC to $7,000 per employee per quarter.The updated ERC, retroactive to March 27, 2020, also allowed employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages not treated as payroll costs in obtaining forgiveness of the PPP loan. To apply, youll need to measure your business gross receipts in Q1 2021 as compared to Q1 2019. WASHINGTON The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) today issued a safe harbor allowing employers to exclude certain items from their gross receipts solely for determining eligibility for the Employee Retention Credit (ERC).Those not in business in 2019 could use the corresponding quarters from 2020.Employers qualified if they were ordered to fully or partially shut down or if their gross receipts fell below 50% for the same quarter in 2019 (for 2020) and below 80% (for 2021).The original ERC gave employers a maximum credit of up to $10,000 per employee retained from March 13, 2020, to Dec.
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