The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% (in 2020) and 70% (in 2021) of the qualified wages an eligible employee is paid.
A company that received or receives a PPP (Paycheck Protection Program) loan is no longer prohibited from claiming the employee retention tax credit.
The credit can be used against certain employer taxes
- For qualified wages paid in 2020 you can receive a credit of 50% of each employee's wages up to $10,000.
In 2020 the annual cap credit is $5,000 per employee (across all Quarters).
in 2021 the credit increases to 70% of wages per employee up to $10,000 per quarter for the first two quarters of 2021 (possible $14,000 credit per employee).