Employee Retention Credit Program

Cares Act of March 2020 the US Government enacted the Employee Retention Credit for the purpose of providing refundable employment tax credits to businesses with the intent to assist with the cost of keeping staff employed during critical periods of the Covid-19 virus.

• The ERC for 2020 allowed the waiver of the employer’s matching portion of each eligible employee’s Social Security Tax for applicable quarters; and

• Up to the maximum credit of 50% of the first $10,000 earned by each employee within Quarters 2, 3, and/or 4. This equates to a maximum ERC of $5,000 for each employee’s earned wages of $10,000 from April 1 to December 31, 2020.

The Relief Act of 2021 extends the ERC to January 1 – June 30, 2021. The major difference with this act, as opposed to the Cares Act of March 2020, is that:

• The Relief Act of 2021 increased the maximum to 70% for $10,000 wages earned per employee per Quarter 1 & Quarter 2, 2021.

• The maximum ERC is $7,000 per employee per quarters 1 & 2 if wages equal at least $10,000 each quarter. Thus, the total maximum ERC per employee for quarters 1 & 2 of 2021 is $14,000 if employee wages were at least $10,000 each quarter.