The Employee Retention Credit (ERC) is a refundable tax credit under the CARES Act that encourages businesses to keep their employees on payroll. The ERC applies to both full-time and part-time workers, provided their employers meet the requirements. The Internal Revenue Service (IRS) offers a guide to frequently asked questions about the ERC, which covers all the important steps you need to know if you are eligible for the credit and how to apply for it. Additionally, the IRS provides a guide on how to determine the maximum amount of an eligible employer's employee retention credit. Under IRC Section 280C, employers cannot deduct salaries and health insurance costs related to certain disadvantaged or low-income full-time or part-time employees by an amount equal to specific non-refundable income tax credits.
To find out if your company qualifies for the ERC, schedule a free consultation with a disaster loan counselor. The ERC is equivalent to 50 percent of qualifying wages (including qualifying health plan expenses) that an eligible employer pays in a calendar quarter. For more information on how to apply for the refundable employee retention credit, see How to Apply for the Employee Retention Credit. The ERC was a tax credit designed to help small businesses keep their employees on payroll during the COVID-19 pandemic. Disaster loan counselors can help businesses with the complex and confusing ERC and Employee Retention Tax Credit (ERTC) program.
The ERC was a refundable tax credit in which business owners received a refundable tax credit for keeping employees on payroll during the COVID-19 pandemic. The IRS has an official list of frequently asked questions related to all common questions about the employee retention credit on its website. The IRS also provides a detailed guide to frequently asked questions about employee retention credits, which is a tax credit against certain employment taxes that is equivalent to 50% of qualifying wages. The ERC is a fully refundable tax credit for employers that is equivalent to 50 percent of qualified wages (including allocable qualified health plan expenses) that eligible employers pay to their employees. For more information, see Determining Which Employers Are Eligible to Apply for the Employee Retention Credit.