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Employee Retention Credit (ERC) Refund

In response to the many challenges faced by small businesses during the coronavirus pandemic, Congress passed relief legislation including the Employee Retention Credit. This government tax credit allowed employers keep staff working during the worst of COVID-19. The Employee Retention Credit (ERC) is COVID relief funding for small and midsize businesses. Passed at the height of the coronavirus pandemic, this government tax incentive was designed to help companies continue to pay employees during the crisis.


The ERC is calculated based on the payroll taxes you paid for full-time employees in 2020 and 2021. In the first year of the ERC, only companies with less than 100 employees were eligible for the credit. In the second year, the rules changed, allowing companies with up to 500 employees to receive the credit. There are two ways for employers to qualify for the ERC:

The business suffered a significant decline in 2020 or 2021 quarterly revenue (gross receipts) when compared to the same quarter in 2019. Government orders had a more than nominal impact on their overall business operations. This may include full or partial suspension of operations due to social distancing or capacity requirements, supply chain issues, reduced operating hours, employee training issues, etc.


  • 2020: The IRS allowed 50% of the first $10,000 in qualified wages for each employee for the year or $5,000 in credit.
  • 2021: The IRS allowed 70% of wages paid per quarter, up to $7,000 in qualified wages per employee, per quarter, for the period January 1, 2021 - September 30, 2021, for a maximum credit of $21,000.