The Employee Retention Credit (ERC) is a refundable tax credit for businesses and tax-exempt organizations that was introduced with the Coronavirus Aid, Relief and Economic Security (CARES) Act in 2020 during the COVID-19 pandemic to help businesses recover from the economic fallout that occurred. The ERC is a payroll tax credit, not an income tax credit, that businesses can claim on qualified wages, including certain health insurance costs, paid to employees. The credit is 50% of up to $10,000 in wages paid by an employer whose business is fully or partially suspended because of COVID-19 or whose gross receipts decline by more than 50%. The ERC is a fully refundable tax credit, which means that businesses can receive the credit even if they do not owe any payroll taxes.

The ERC program officially concluded at the end of November 2021, but businesses can still file retroactively. The credit could be claimed on wages paid until September 30, 2021, with certain businesses having until December 31, 2021, to have paid qualified wages. The credit from the ERC can potentially reach up to $28,000 per employee for 2021.

In summary, the ERC is a refundable tax credit for businesses and tax-exempt organizations that was introduced during the COVID-19 pandemic to help businesses recover from the economic fallout that occurred. The credit is based on qualified wages paid to employees and is fully refundable, meaning that businesses can receive the credit even if they do not owe any payroll taxes. Although the ERC program officially concluded at the end of November 2021, businesses can still file retroactively.