The Employee Retention Credit (ERC) was a refundable employment tax credit for eligible employers with qualifying wages in 2020 and 2021. Eligibility depended on the period and circumstances, including qualifying government shutdown orders, declines in gross receipts, or recovery-startup rules.
Eligibility and PPP wages
Employee count alone did not establish eligibility. It also affected which wages could qualify. Employers could receive a PPP loan and claim the ERC, but could not use the same wages for PPP forgiveness and the credit.
Check an existing claim
Later legislation changed the treatment of some claims. The IRS says ERC claims for the third and fourth quarters of 2021 filed after January 31, 2024 cannot be allowed or refunded after July 4, 2025, even if the employer otherwise qualified.
If you have a pending claim or a disallowance notice, review the current IRS guidance with a qualified tax professional. Keep the payroll records and eligibility evidence supporting your claim.
