The Employee Retention Tax Credit (ERTC) or ERC (Employee Retention Credit) was part of the Coronavirus Aid and Relief and Economic Security (CARES) Act. This was introduced to help businesses keep their employees on payroll during the COVID-19 pandemic.
According to the U.S Bureau of Labor Statistics, in 2020, 52% of establishments told employees not to work at some point during the pandemic and, of those, 51% continued to pay some or all employees while not working. This caused extreme financial burdens for many small businesses.
The ERC tax credit could be the boost your business needs to get back on track.
In this article, we’ll explain what ERTC is, what documents you will need to file for ERTC, and how to claim ERC.
If you already know you want help filing for ERTC, learn more about our ERTC filing service here.
What is ERTC (Employee Retention Tax Credit)?
ERTC is a refundable tax credit giving businesses a check for up to $26,000 per employee on their payroll.
According to the IRS, the refundable tax credit is 50% of up to $10,000 in wages from March 12, 2020, to December 31, 2020, and 70% of eligible wages paid from January 1, 2021, to September 30, 2021.