1825 NW Corporate Blvd, Boca Raton, FL 34331
Employee Retention Credit (ERC) is a significant relief aid introduced in response to the economic turbulence caused by the Covid-19 pandemic. It's a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. The purpose of the ERC was to encourage businesses to keep employees on their payroll, despite experiencing economic hardship related to COVID-19 disruptions on business operations. The ERC carries significant importance - it alleviates some of the financial strain on businesses, enabling them to continue operations and maintain employment levels.
Legislative developments have notably impacted the ERC. The Consolidated Appropriations Act, passed in December 2020, extended and expanded the ERC, making more businesses eligible and increasing the credit percentage from 50% to 70% of qualified wages. Also, the American Rescue Plan Act of 2021 extended the availability of the ERC through December 31, 2021. These legislative measures have further bolstered the ERC's role in supporting businesses and maintaining employment levels amidst ongoing economic challenges in the US.