The ERC is a refundable payroll tax credit that can be as high as $5,000
per employee in 2020 and as high as $21,000 per employee in 2021.
This credit is calculated differently for eligible quarters in 2020 and 2021. An eligible employer can claim up to $5,000 per employee in 2020 and up to $7,000 per employee per qualifying quarter in 2021. The maximum amount you can claim per employee is $26,000.
While small employers with 100 or fewer employees in 2020 (500 or fewer in 2021) receive more benefits under ERC, large employers can still take advantage of the ERC.
Yes! While wages funded by a PPP loan can’t be included in the ERC calculation, ERC has much wider applicability than your PPP loans. During your claim process with REV by Goldman Sachs Capital, you’ll need to provide details on your PPP loans to help qualify employee wages for the ERC.
There is a wide range of businesses that qualify for the ERC. The most typical businesses that qualify are the following industries:
Education | Hospitality | Healthcare | Retail | Industrial | Legal Services | Construction and more!
The Employee Retention Credit (ERC) is a tax credit created under the CARES Act. This refundable tax credit is a relief measure for businesses that encourages them to keep employees on their payroll. The ERC legislation was expanded under the Consolidated Appropriations Act, which took effect on January 1, 2021, and because of this expansion, all employers who took PPP loans could be eligible for the ERC for 2020 and 2021. Because the ERC legislation is changing, Goldman Sachs Capital dedicates a staff of tax professionals to ensure your claim is compliant with all new IRS guidance.
Employers that experienced partial shutdowns due to
government orders limiting commerce, travel or group
meetings; or that experienced significant declines in quarterly
gross receipts (as compared to their quarterly gross receipts in
2019) due to the pandemic are eligible employers under this
ERC credits are calculated based on the qualifying wages paid to
employees during eligible employer status. For most companies
taking advantage of this program, the refundable tax credits are
well in excess of the payroll taxes paid by the employers. ERC
benefits can be larger than the amounts a company received in
Small employers receive enhanced benefits under the ERC
regime. Specifically, for the time they are an Eligible Employer,
they can include wages paid to all employees. Large employers
can only include wages paid to employees for not providing
No. An employer may include wages paid to part-time and full-time
employees in the calculation of the ERC. The only limitation on the
calculation of the credits is that an employer may only calculate the
credits on the first $10,000 of wages and health plan costs paid to
each employee during each credit-generating period.
For the 2020 ERC, an employer with 100 or fewer average
full-time employees (as measured in 2019) is defined as a
For the 2021 ERCs, an employer with 500 or fewer full-time
employees (as measured in 2019) is defined as a small
The term “full-time employee” means an employee who, with
respect to any calendar month in 2019, had an average of at
least 30 hours of service per week or 130 hours of service in
the month (130 hours of service in a month is treated as the
monthly equivalent of at least 30 hours of service per week),
as determined in accordance with section 4980H of the
Code. An employer that operated its business for the entire
2019 calendar year determines the number of its full-time
employees by taking the sum of the number of full-time
employees in each calendar month in 2019 and dividing that
number by 12. Special rules apply to those who were not in
business all of 2019
Technically, yes, but you only pay qualifying wages while the
mandates are in effect and they are having a more than nominal
impact on the business.
No, but, if possible, allocate the maximum available non-wage
allowable costs to the PPP being forgiven
Yes. While an employer may not include wages funded by a PPP
loan in the ERC calculation, PPP funds only apply to eight to ten
weeks of wage expenses. The ERC eligibility periods are longer.
PPP loans can also fund non-wage expenses.
For ERC purposes, it is most important to develop work papers
that allocate the PPP funding across the entire 24 week
PPP funding may be allocated to wages that would not
generate any ERC (e.g., to owners of the company or to wages
in excess of $10,000 in one of the four ERC credit-generating