The employee retention credit is a valuable tool for employers looking to keep their employees on payroll during the COVID-19 pandemic. Available for wages paid between March 13, 2020, and December 31, 2020, the credit is equal to 50% of the wages paid to each employee, up to a maximum of $5,000 per employee per year.

To qualify for the employee retention credit, an employer must have experienced a decline in gross receipts of at least 20% in a calendar quarter compared to the same quarter in 2019. However, it's important to note that employers who received a Paycheck Protection Program (PPP) loan are not eligible for the employee retention credit.

Claiming the employee retention credit is done by filing Form 941, Employer's Quarterly Federal Tax Return, Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, or Form 944, Employer's Annual Federal Tax Return, depending on the employer's situation.

In conclusion, the employee retention credit provides an opportunity for employers to keep their employees on payroll during these uncertain times. Employers who meet the criteria and file the correct forms can take advantage of this credit.

The employee retention credit is for a limited time so you need to see if your business qualifies as soon as possible.

ERC Filings Deadlines:

An eligible employer claiming a refundable credit for any quarter in 2020 must file its 941x forms by April 15, 2024.

An eligible employer claiming a refundable credit for any quarter in 2021 must file its 941x forms by April 15, 2025.