You get a credit equal to 50% or $500. If eligible, recipients of the ERC may: For Tax Year 2021: Receive a credit of up to 70% of each employee’s qualified wages. This notice does not address the changes made by section 207 of the Relief Act that apply to the employee retention credit for qualified wages paid after December 31, 2020. Employee Retention Credit = (Qualified wages + Qualified Health Plan Expenses) x 50%. Employers can now claim the Employee Retention Credit (ERC) for 70% of up to $10,000 in wages, per employee, for quarters in 2021. For wages paid from January 1, 2021, through June 30, 2021, the Employee Retention Credit becomes even more beneficial: The credit amount is increased to 70 percent and the wage limit is increased to $10,000 per quarter, per employee. The credit is available for eligible employers whose businesses have been financially impacted by COVID-19. employee retention credit as it applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The Department of the Treasury (Treasury) and the Internal What is the Employee Retention Credit? This is only effective for wages paid Jan 1, 2021 through Dec 31, 2021. The ERC is a refundable payroll tax credit that is available to employers who meet certain criteria as laid out in the Consolidated Appropriations Act, 2021. This stands in contrast to 2020, for which an eligible employer can only be able to receive credit for 50% of the first $10,000 of qualified wages paid per employee for all quarters of 2020. Let me provide three quick examples to show you how this works… Example 1: Suppose you pay an employee $1,000 of qualified wages.
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