Congress introduced the ERC through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March of 2020 and subsequently bolstered the program through the Consolidated Appropriations Act (CAA), and the American Rescue Plan Act (ARP).
Congress created the Employee Retention Credit (ERC) to help provide relief for businesses that the Pandemic impacted.
Unlike PPP, the ERC is not a loan, and funds can be used for any purpose. Companies can qualify for tax years 2020 and 2021 based on stress tests focused on revenue decline, operational impacts from government mandates, or startup business status.
Taxpayers could qualify in seven eligible quarters, with a maximum benefit of $26,000 per employee.