what is the erc

The Employee Retention Credit (ERC) is a refundable tax credit for businesses and tax-exempt organizations that was introduced with the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 during the COVID-19 pandemic to help businesses recover from the economic fallout that occurred. The ERC is a broad-based refundable tax credit designed to encourage employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an employer whose business is fully or partially suspended because of COVID-19 or whose gross receipts decline by more than 50% . The ERC was amended three separate times after it was originally enacted as part of the CARES Act by the Taxpayer Certainty and Disaster Relief Act of 2020 (Relief Act), the American Rescue Plan (ARPA) Act of 2021, and the Infrastructure Investment and Jobs Act. Although it ended on December 31, 2021, eligible employers may still be able to claim the tax credit by filing amended forms with the Internal Revenue Service. However, due to a substantial number of improper claims, processing of amended forms claiming the Employee Retention Credit has been temporarily suspended as of September 14, 2023.