To qualify for this tax credit

In March 2020, the IRS issued a temporary rule providing relief to businesses, especially small businesses, due to the economic disruptions caused by the COVID-19 pandemic. The credit was effective for the three months period from March 13, 2020, to June 30, 2020, during which time businesses were unable to continue paying regular wages to employees. To qualify for this tax credit, a business must have been affected by the pandemic and be considered closed for 3 months due to Employee Retention Credit the COVID-19 pandemic. This includes being closed due to government restrictions and/or having a significant decline in gross receipts. The credit is refundable so it is possible for businesses to owe no taxes for the 3-month period and receive a refund check. Businesses are required to keep payroll records and have a detailed record of payments and wages paid. The amount of the ERC is computed as 50% of the wages paid for the 3-month period. A business can receive a maximum ERC of $25,000 per year. For example, if a business had 5,000 total wages paid, the business would receive a refund of $12,500. There are two types of ERC.