FAQs

The Employee Retention Credit has been a hot topic for businesses recently and you’ve probably heard about it, but still have some questions. So, what is the ERC? The Employee Retention Credit (ERC) is a refundable payroll tax credit filed against employment taxes. ERC was introduced with the Coronavirus Aid, Relief and Economic Security (CARES) Act in 2020 during the COVID-19 pandemic to help businesses recover from the economic fallout that occurred.

It essentially provides funding to businesses to make up for some revenue lost during the pandemic. Some companies might even argue that the ERC has been their lifeline post-COVID-19, enabling them to retain critical employees and continue business operations.

The ERC has been amended three separate times after it was originally enacted as part of the CARES Act by the Taxpayer Certainty and Disaster Relief Act of 2020 (Relief Act), the American Rescue Plan (ARPA) Act of 2021 and the Infrastructure Investment and Jobs Act (IIJA).

Credit from the ERC can potentially reach up to $28,000 per employee for 2021. It essentially rewards companies that had employees on payroll during the pandemic. Since the United States government orders created restrictions that financially affected businesses, this is a way of compensating those impacted businesses.

Because many businesses faced economic decline during the pandemic, the U.S. government passed the ERC as an opportunity for businesses to get funded for lost revenue. It encouraged employers to keep their employees on the payroll, even if they were not working during COVID-19.

The goal was to sustain the economy during the coronavirus pandemic. Congress voted to pass a $1.9 trillion relief bill so that businesses could benefit. The IRS initially predicted that 70 percent of businesses would claim the Employee Retention Credit.

You can no longer claim the ERC for 2020 or 2021 because the filing deadline has passed. If your business previously filed an Employee Retention Credit (ERC) claim, we can assist with allowances, examinations, or follow-ups. Our team is ready to help navigate any questions or issues with prior ERC submissions.