What is the ERC?

The Employee Retention Credit (ERC) is a refundable tax credit designed to help eligible employers offset certain employment taxes on qualified wages paid to employees between March 12, 2020, and September 30, 2021. Established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the ERC aims to support businesses in retaining their workforce by easing financial burdens.

In 2020, the ERC provided eligible employers with a refundable tax credit of up to $5,000 per employee. For 2021, the credit was enhanced to cover 70% of qualified wages, up to $10,000 per employee per quarter, for the first three quarters of the year—allowing businesses to claim a total of up to $26,000 per employee.