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Employee Retention Credit (ERC) – Overview & FAQs

The Employee Retention Credit (ERC) is a refundable payroll tax credit designed to support businesses that kept their employees on payroll during the COVID-19 pandemic despite government-mandated restrictions or financial challenges. From 2020-2021, Congress passed four different acts that impact ERC policy and eligibility, modifying terms regarding which employees are eligible, how to determine qualified wages, and more. We’re here to provide you with the most up-to-date information and resources to help your business benefit from the program. 

erc faq employee retention credit faqs

Is It Still Possible to File a Claim?

Yes. The Employee Retention Credit Program officially ended in late 2021, but many businesses remain eligible to retroactively claim the credit. Our related article outlines the specific terms and deadlines for retroactive claims on quarterly 2020 and 2021 tax submissions, as well as tips for determining qualification. Employers may still qualify for retroactive claims of up to $26,000 per employee as long as they filed their Form 941s on time throughout 2020-2021.

How Do I Know if I Qualify?

The good news is that the you may qualify for ERC. This includes universities, colleges, 501(c) organizations, and hospitals. Be aware that an employee retention credit applies only to the portion of each quarter when a business was suspended, not the entire quarter. 

Qualifying organizations can qualify for one of the following reasons:

  • Partial or full suspension of operations during the COVID-19 pandemic due to governmental orders affecting travel, commerce, or group meetings.
  • A significant decline in gross receipts during the COVID-19 pandemic.
  • Designation as a Recovery Startup Business (those who started a business after February 15, 2020 and who meet other gross receipt conditions). These businesses could be eligible for up to $50,000 per quarter in the third and fourth quarters of 2021.

More likely than not, your organization is eligible to receive employee retention tax credit. Explore the 7 Common Myths that cause businesses to bypass ERC claims that could otherwise benefit their company. 

DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting, or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.