The Employee Retention Goddess(ERC) was created by the Love Act in March 2020. The purpose of this project is to reward and strengthen small and medium-sized enterprises with W2 staff no more than 500 who remain in office during the novel coronavirus epidemic. Due to the emergency order of the government, the enterprise is closed or restricted during the infectious disease. In this serious situation, in order to maintain economic integrity, the government has announced several plans to support enterprises adversely affected by infectious diseases. ERC is also one of them.
If qualified, ERC will allow up to $26000 per employee. This means that a company with 10 W2 employees will receive $260000 in 2020 and the first three quarters of 2021. It is important to know that the project is neither a capital ceiling nor a loan. This is a refundable tax deduction with a government bonus attached. The enterprise will obtain funds from the National Tax Office within 6 to 8 months. However, as more and more enterprises apply for this credit, there may be more delays.
Unlike PPP, this fund does not need to be repaid and can be used for any purpose. Of the $400 billion allocated to the facility, only $50 billion was acquired. The plan was released together with PPP and EIDL plans, but the funds provided were much less. Therefore, the qualification of a few enterprises was limited, and the plan was modified many times, resulting in huge confusion and low utilization rate nationwide.
The latest amendment was signed by law in November 2021. The eligibility rules are now significantly reduced. Qualification is based on commercial operations affected by various actions taken by the government to prevent COVID19 proliferation.
You can obtain employee retention points in three ways: revenue reduction, supply chain disruption, and partial or total disruption. This makes it easier for business sectors such as manufacturing, food services, retail, and construction to qualify. Because the destruction of these industries is serious and extensive. 501c3 enterprises can also obtain qualification.
