Employee Retention Credit (ERC)

The Employee Retention Credit (ERC) was originally established by the CARES Act to help small businesses affected by COVID-19. The ERC is a refundable tax credit applying to the 6.2% employer portion of employee Social Security payroll tax, computed on a calendar-quarter basis. To provide further economic relief to employers affected by government-mandated shutdowns and economic uncertainty, the Consolidated Appropriations Act, 2021 (CAA) and the Amercian Rescue Plan Act of 2021, extended the ERC and broadened eligibility standards. The ERC is an opportunity employers can’t afford to overlook, and understanding eligibility and terms can help maximize the benefits their companies see in return.

 

*Recent Updates:

• Treasury, IRS provide gross receipts safe harbor for employers claiming the Employee Retention Credit, 8/10/21
• Treasury, IRS provide additional guidance to employers claiming the employee retention credit, including for the third and fourth quarters of 2021
• IRS provides guidance for employers claiming the Employee Retention Credit for first two quarters of 2021

 

Additional ERC Resources:

• Employee Retention Credit, Refundable Tax Credit, Launch Announcement
• Employee Retention Credit, Overview
• Employee Retention Tax Credit IRS FAQ’s
• Employee Retention Tax Credit Clarification and IRS FAQ’S Extension
• Employee Retention Credits, Determining Qualified Wages IRS FAQ’s
• IRS Guidance for Employers Claiming the ERC for 2020, Including Eligibility Rules for PPP Borrowers
• IRS Form 7200, Advance Payment of Employer Credits: Information

 

Additional Commonwealth Resources: 

• Commonwealth’s Employee Retention Credit Seeker Program – Understanding eligibility details of the ERC can be tricky. CommpayHR is prepared to guide you through this process. Our Credit Seeker Program does all the work in helping businesses determine if they qualify for the ERC and helping to maximize available credits.
• Webinar: Maximizing Your Company’s Return with the Employee Retention Credit – On February 5, 2021, we co-sponsored a panel discussion with HUB International’s Tim Quin, David Natan of Newburg CPA, and Jeff Plakans of Commonwealth Payroll & HR. Moderated by HUB’s Marc Mingolelli, the panelists provided an in-depth look at the ERC. Our experts walked through examples and high-level calculations; talked about the credit’s impact on your business taxes and explained why the ERC is an opportunity you can’t afford to overlook. Watch the recording to learn about eligibility and how you can maximize your return.

• Article: Why Employers Can’t Afford to Overlook the Employee Retention Credit

 

As you navigate new and evolving relief programs and legislation, our professionals are available to answer your questions. Contact us today to learn how Commonwealth can help with your ERC, PPP Loan Forgiveness, payroll, and HR needs.