Employee Retention Tax Refund. Do you know What It Is?

Employee Retention Tax Credit (ERTC) is a refundable tax credit provided by the US government to incentivize employers to keep their employees on the payroll during COVID-19 pandemic. Under the CARES ACT, this credit was introduced as a part of the COVID-19 relief for businesses that were affected by the pandemic.

The ERTC is available to businesses that have experienced significant losses due to the pandemic and have retained their employees during that period. The credit is equal to 50% of up to $10,000 in wages and health care expenses per employee for the calendar year 2020 and the first two quarters of 2021.

Many businesses have struggled to stay afloat during the pandemic, and retaining their workforce has been a challenge. The ERTC is designed to help businesses cover their costs and support them in retaining their workforce. This credit is refundable, meaning that if the amount of the credit exceeds the business's payroll taxes, the business can receive a refund check from the government.

To claim the ERTC, businesses must meet certain criteria, including demonstrating that they have experienced a significant decline in gross receipts compared to the previous year. Businesses can claim the ERTC on their quarterly payroll tax returns, and the credit will be applied against their portion of the Social Security tax.

Overall, the Employee Retention Tax Credit is a valuable tool for businesses that have been affected by the pandemic and are looking to retain their employees. It provides them with a refundable tax credit that can help cover their payroll costs and support their continued operations during these uncertain times.