If your business had payroll costs that were more than the amount covered by your PPP loan, you may be able to claim tax credits for those additional payroll costs. If your business is eligible for the ERC for 2020 and you have not yet claimed the credit, you can file amended payroll tax forms to claim the credit and receive your tax refund.īusinesses that took out PPP loans in 2020 can still go back and claim the ERC, but they cannot use the same wages to apply for forgiveness of PPP loans and to count toward the ERC. If the amount of the tax credit for an employer is more than the amount of the employer’s share of social security tax owed, the excess is refunded – paid – directly to the employer. The tax credit is 50% of the wages paid up to $10,000 per employee, capped at $5,000 per employee. This credit of up to $28,000 per employee for 2021 is available to small businesses who have seen their revenues decline, or even been temporarily shuttered, due to COVID.įor 2020, the ERC is a tax credit against certain payroll taxes, including an employer’s share of social security taxes for wages paid between Maand December 31, 2020. The American Rescue Plan extends the availability of the Employee Retention Credit for small businesses through December 2021 and allows businesses to offset their current payroll tax liabilities by up to $7,000 per employee per quarter.
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