Employee retention credit (ERC) helps employers to pay salaries to their employees while facing a financial crisis caused by the pandemic.
Revenue reduction in any quarter of 2020 and/or 2021
Lack of group meetings
Full or partial suspension of your operations
Reduction in services offered
Shutdowns of supply chains or vendors
A disruption in your business
Lack of travel
Inability to visit a client’s job site
Change in job roles and functions
The inability to deliver the goods and materials to suppliers
ERC can only be dispersed to employers who have seen a significant decline in gross receipts or have been subjected to a government shutdown order.
The employer must have maintained its workforce at 80% of its pre-downturn level.
The credit can surely be claimed against payroll taxes equal to 50% of the wages paid to employees during the period of economic downturn.