What is the Employee Retention Credit (ERC)?

The Employee Retention Credit (ERC) is a refundable tax credit against certain payroll taxes that was initially established under the CARES Act to help businesses with the cost of maintaining employment during the pandemic. The ERC is available to companies whose operations were subject to a full or partial suspension due to a government order, or who experienced a significant decline in gross receipts during the pandemic. The size of the credit is determined based on a percentage of “qualified wages,” including allocable qualified health plan expenses that a eligible employer pays to employees.