What is ERTC?

The ERTC or Employee Retention Tax Credit is a federal tax credit aimed at helping businesses affected by the coronavirus pandemic. It is a refundable tax credit for employers that are subject to closure due to government orders or have experienced a significant decline in gross receipts. The ERC provides businesses with a credit of up to 50% of wages paid to employees, up to $10,000 per employee, during the period of economic hardship. Businesses can also take advantage of additional credits depending on the size of their workforce and wages they have paid. This tax credit is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and is designed to help business owners keep their employees on payroll and remain operational during this difficult time.

To qualify, an employer must meet the following requirements:

• Be subject to closure due to government order or have experienced a significant decline in gross receipts in 2020 and/or 2021
• Have paid wages to employees during the period of economic hardship
• Have filed a valid claim for the ERC

To calculate the ERTC, businesses must first determine their federal income tax liability for the year in question. This is done by multiplying thier taxable income by their marginal federal income tax rate. Next, they subtract the amount of ERC credits that they are eligible for (based on their taxable income and company size). The resulting number is their ERC liability. To claim this liability, businesses must file Form 8379, Employer's Tax Credit Certificate.

However, that's where the process can get complicated. That's why we at ERC Services specialize in taking care of the complication so you can relax and know you will get all the benefits you deserve.