Employee Retention Credit (“ERC”)

The ERC is a fully refundable tax credit available to companies with 500 or fewer FTEs (in 2019)

• Maximum benefit of $5,000 per employee in 2020 (100 or fewer FTEs)
• Maximum benefit of $21,000 per employee in 2021 (500 or fewer FTEs)

Qualitative test

Employer was either fully or partially suspended by a COVID-19 lockdown order.  A few examples include:

• A restaurant maintained steady revenue due to strong drive through, curbside pick-up or delivery, however, indoor dining was closed or at limited capacity due to a governmental order.
• A company’s supply chain providing materials, parts or equipment has been disrupted (delays, need for alternative supplier) due to governmental orders.
• Sales metrics have been impacted as trade shows and conferences have been cancelled, travel was significantly limited, customer projects were delayed or cancelled - all due to governmental orders.  This resulted in a significant shortfall of forecast vs. actual revenue.
• Employer has experienced a drop in productivity due to governmental orders requiring employees to stay at home, social distance, implement cleaning protocol.