Employee Retention Credit: How Does It Affect Tax Returns? скачать в хорошем качестве

Employee Retention Credit: How Does It Affect Tax Returns?

The Employee Retention Credit is a refundable tax credit for qualified wages your business paid to employees. The credit applies to employment taxes like federal income tax withholding, FICA, and Medicare. The purpose of the credit was to encourage businesses to keep employees on the payroll even if the employees weren’t working due to the COVID-19 pandemic. Congress created the ERC as part of the CARES Act in March 2020. It was one of many provisions to help struggling businesses. Congress later expanded the ERC in several legislative packages related to COVID-19 relief. For the tax year 2021, eligible employers can receive a credit of up to 70% of each employee’s qualified wages. The maximum amount is $7,000 per employee per quarter. For the tax year 2020, you could receive a credit of up to 50% of each employee’s qualified wages. The maximum amount is $5,000 per employee for the year.