Employee Retention Credits 2021
Are Employee Retention Credits (ERC) available for employers in Q3 and Q4 2021? What is an ERC?
The Employee Retention Credit is available for all four quarters of 2021. The first two quarters were covered under the CARES Act, and the last two quarters of 2021 are covered under the American Recovery Plan Act (ARPA). IRS Notice 2021-23 explains changes to the ERC for the first two quarters. IRS Notice 2021-24 makes clear the ERC is available for the last two quarters of 2021.
An Employee Retention Credit helps eligible small businesses and organizations claim a refundable tax credit against the employer share of Social Security tax equal to 70% of qualified wages paid to employees. Organizations with 500 or fewer employees that experienced qualified business disruptions due to the pandemic are eligible.