All You Need to Know About Employee Retention Credit 
We all became confined to the 4 walls of our homes. Each facet of life came to a halt, due to the government imposed strict lockdown to prevent the spread of the novel Coronavirus. Many business owners faced tremendous struggles at the time to keep the business afloat. Expenses were higher in ratio to lesser revenue.
If you’re a business owner, the post-covid circumstance is all the more favorable for you, in terms of tax payments! The Employee Retention Credit (ERC) is just for you! Want to know all about this tax credit? Then stay tuned throughout the write-up!
Besides, if your business incurred a significant decline in gross receipts, then you are eligible for ERC. The decline in the gross receipt is defined as a reduction of 50% in quarterly receipts measured year over year.
For 2021, the Employee Tax Retention (ERC) is 70% of all qualified wages you have paid to your employees from Jan 1, 2021, up to Sept 30, 2021, or until Dec 31, 2021, for Newly Started businesses. For 2020, the ERC is 50% of all qualified wages paid between Mar 12, 2020, and Dec. 31, 2020.
This is a complex tax credit so it must be done accurately so you can maximize the credit. Combined all quarters the maximum credit is $26,000 per employee.
There is no immediate deadline but you have 3 years before the time you paid the wages to claim this refund, so if you’re eligible do not delay!
According to CARES Act- 2020, business owners, who had more than 100 employees not providing services because of suspension or decline in business, can use ERC. Employers can use this credit on employees who were not working. In this case, any wages paid for vacation, sick, or other off days cannot be included as qualified wages.
That’s all about the insights on Employment Credits. Hopefully, we’ve covered all the major points. Get in touch with Ahad&Co for any support in claiming ERC.