Employee Retention Credit – Updated

As part of the Covid-19 relief package, the CARES Act established the Employee Retention Credit to help struggling businesses with their payroll expenses. The Employee Retention Credit is a refundable tax credit against certain payroll tax expenses.

If your business:

• Has 500 or fewer employees;
• Was at least partly closed due to a government order OR the business’s revenue declined by 20% or more for any quarter this year; AND
• You kept employees on the payroll: You may be eligible for 2021 employee retention tax credits of up to $28,000 per employee. And the longer you keep your employees on payroll, the more benefits you are eligible to receive.

For 2021, the employee retention credit (ERC) is a quarterly tax credit against the employer’s share of certain payroll taxes. The tax credit is 70% of the first $10,000 in wages per employee in each quarter of 2021. That means this credit is worth up to $7,000 per quarter and up to $28,000 per year, for each employee. If the amount of the tax credit for an employer is more than the amount of the employer’s share of those payroll taxes owed for a given quarter, the excess is refunded – paid –directly to them.

If you are interested in applying for this credit and need our help, feel free to contact us. Please note that our standard billing rates will apply.

For additional information about the Employee Retention Credit Program, you can go directly to the IRS website at: https://www.irs.gov/coronavirus/employee-retention-credit