• BDO Knows Employee Retention Credit

Employee Retention Credit (ERC) for 2020 and 2021

The ERC was introduced by the CARES Act in 2020, expanded under the Consolidated Appropriations Act of 2021 (CAA), and extended under the American Rescue Plan Act of 2021 (ARPA). It is designed to encourage employers (including tax-exempt entities) to keep employees on their payroll and continue providing health benefits during the coronavirus pandemic.

Under the CAA and ARPA expansions, the ERC was expected to be available for all of 2021. But the Infrastructure Investment and Jobs Act (IIJA), signed by President Biden on November 15, ended the ERC retroactively as of September 30, 2021 for most employers. The IRS on December 6 issued guidance that provides penalty relief for some employers who took advantage of the ERC on fourth quarter 2021 earnings.

The ERC is a refundable payroll tax credit for wages and health plan expenses paid or incurred by an employer whose operations were either fully or partially suspended due to a COVID-19-related governmental order or where the employer experienced a significant reduction in gross receipts. Stay up to date on the latest ERC guidance with our resources below. Follow BDO’s Tax Policy Watch to learn how possible tax law changes may impact you and your business.

The ERC can be claimed retroactivity, and many businesses have yet to claim their benefit.

ERC CALCULATOR

Are you missing out on unclaimed ERC benefits?
 

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