The Employee Retention Tax Credit is considered one of our Hiring Incentives and the most current version was signed into law as a result of the COVID-19 crisis with the CARES Act in 2020.  However, there is a previous version of the Employee Retention Tax Credit that focuses on Disaster Relief.  For purposes of clarifying the differences between the two we call the current version COVID ERC or C-ERC and the previous version Disaster ERC or D-ERC. https://stryde.me/281143

COVID-ERC

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created a new employee retention tax credit for employers who closed, partially or fully, and experienced significant revenue losses as a result of COVID-19.

Who Is Eligible:

Private employers, including non-profits, carrying on a trade or business in 2020 that:

• Have operations partially or fully suspended as a result of orders from a governmental authority due to COVID-19, or
• Experience a decline in gross receipts by more than 50% in a quarter compared to the same quarter in 2019 (eligibility ends when gross receipts in a quarter exceed 80% of the same 2019 quarter)

Who Is Eligible:

Private employers, including non-profits, carrying on a trade or business in 2020 or 2021 that:

• Have operations partially or fully suspended as a result of orders from a governmental authority due to COVID-19, or
• Experience a decline in gross receipts by more than 20% in a quarter compared to the same quarter in 2019  https://stryde.me/281143

How Much Is The Tax Credit for 2020?

C-ERC is a 70% tax credit for the first $10,000 of earnings paid each quarter between January 1, 2021 and June 30, 2021 per eligible employee.  This amount can include the employer portion of health benefits.  Basically, for every eligible employee who earned $20,000 or more during this time period would provide the employer with a $14,000 tax credit. https://stryde.me/281143

How Is The Credit Taken?

The COVID ERC is applied against the employer portion of payroll taxes.  

Can PPP and ERC be taken by the same employer?

As of December 21, 2020 and the passing of the Consolidated Appropriations Act of 2021, employers can take both PPP and ERC. Congress will allow employers to claim both, but not for the same dollars of payroll costs.  They can be stacked for the highest benefit to the client. https://stryde.me/281143

Credit Stryde and Growth Management Group for this.