COVID-19 has been a challenge for all of us. As the world shut down the economy came to a halt, leaving the future of many businesses in a precarious position. As we begin to find normalcy again, businesses now have to focus on recovering and fortunately, several government programs are easing this process.
One such program is the Employee Retention Credit or ERC, which is a generous stimulus program designed to bolster those businesses that were able to retain their employees during this challenging time. Due to the extremely complex tax code and qualifications, it is severely underutilized. Details of the program include:
The rules for the credit vary depending on which period the employer paid wages eligible for the credit.
March 12, 2020 through December 31, 2020:
Applicable law: CARES Act §2301, as amended by the Taxpayer Certainty and Disaster Tax Relief Act (TCDTRA) §206. Supplemental guidance was issued in IRS Notice 2021-20.
January 1, 2021 through July 1, 2021:
Applicable law: CARES Act §2301, as amended by the TCDTRA §207. Supplemental guidance was issued in IRS Notice 2021-23.
July 1, 2021 through December 31, 2021:
Applicable law: The American Rescue Plan.
