The Employee Retention Credit (ERC) is a stimulus government aid program established by the CARES Act. It is a refundable tax credit – a grant, not a loan – that businesses can claim, and can recoup up to $26,000 per employee.
Who is the ERC Program For?
This program was created for companies that showed a decline in revenue, changes or adjustments in standard business operations, or partial/full business suspension during the Covid-19 pandemic and paid employees on W2 payroll during the years 2020 and 2021.
Is ERC like PPP?
No, The PPP is a loan program that provides funds to small businesses to help them keep their employees on the payroll. The ERC, on the other hand, is a tax credit that businesses can claim for eligible wages paid to employees during the pandemic and do not need to be repaid. Businesses that filed for PPP are also still eligible to receive ERC.
There are various factors that can affect eligibility for ERC. Also, many businesses assume they do not qualify because of various assumptions. Here are some hard facts that will help:
Next Steps – to learn more about the ERC and if your organization qualifies, please contact Trusted CFO Solutions.
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