Employee Retention Credits Employee Retention Credits (ERC) were created and made available under the enactment of the Coronavirus Aid, Relief and Economic Security Act of 2020 (CARES Act). Subsequently, the American Rescue Plan Act of 2021 and the Taxpayer Certainty and Disaster Tax Relief Act of 2021 expanded the ERC to allow more businesses to be eligible. We wanted to research the ERC to see if it could benefit our Chamber Members. After sitting down with a Certified Public Accountant, we left with some information that might be beneficial for our members and the local economy. While many businesses have quickly and incorrectly determined they are ineligible for the ERC, it is important to speak with a tax advisor. PPP recipients are not automatically disqualified, a widely held misperception. 

ERC is available for eligible employers, including tax-exempt organizations, that pay qualified wages, including certain health plan expenses, to some or all employees between March 12, 2020 and September 30, 2021. Generally, there are two sets of rules for the ERC. The 2020 ERC has one set of guidelines and the 2021 ERC has a similar, but different set of guidelines. Below is a brief summary of those guidelines. 2021 eligibility does come with an alternative evaluation method for determining a decrease in gross receipts and an expanded credit for recovery startups, these issues are not discussed here. 

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