What is the eligibility for Employee Retention Credit?
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Last modified 4/25/2023 3:04:39 AM EST |
Added by TaxBandits Team
Applicable To
94X
1099
W-2
ACA
W-4
The Employee Retention Credit (ERC) is a tax credit available to eligible employers that continued to pay employees while shut down due to the COVID-19 pandemic or had significant declines in gross receipts from March 13, 2020 to Dec. 31, 2021. Eligible employers can claim the ERC on an original or adjusted employment tax return for a period within those dates.
To be eligible for the ERC, an employer must meet one of the following criteria:
- Sustained a full or partial suspension of operations limiting commerce, travel, or group meetings due to COVID-19 and orders from an appropriate governmental authority or
- Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021 or
- Qualified in the third or fourth quarters of 2021 as a recovery startup business.