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Employee Retention Credit

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What is Employee Retention Credit (ERC)?

The Employee Retention Credit or ERC is a refundable tax credit designed to award businesses that retained their workers through the covid-19 pandemic. This is an excellent opportunity for businesses that experienced lowered incomes or shutdowns during 2020-2021.

The ERC is made to provide benefits to both small and middle-sized companies that operated during the pandemic. This tax credit was signed into law under CARES Act 2020 to facilitate businesses to aid in coping with the pandemic-produced losses.


The credit is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before January 1, 2022. Eligibility and credit amount vary depending on when the business impacts occurred. The ERC is not available to individuals.

Generally, businesses and tax-exempt organizations that qualify are those that:

  • Were shut down by a government order due to the COVID-19 pandemic during 2020 or the first three calendar quarters of 2021, or
  • Experienced the required decline in gross receipts during the eligibility periods during 2020 or the first three calendar quarters of 2021, or
  • Qualified as a recovery startup business for the third or fourth quarters of 2021


Eligible employers must have paid qualified wages to claim the credit.

Eligible employers can claim the ERC on an original or adjusted employment tax return for a period within those dates.

Contact Opalescent Funding for more details