The 7 Step Employee Retention Tax Credit Calculation Worksheet
American businesses continue to feel the impacts of the COVID-19 pandemic, as the job market and economy at large still seem to be on unsteady ground. Some estimates claim that there have been 200,000 extra permanent business closures because of the pandemic and the unemployment rate initially skyrocketed, only recently having lowered to pre-pandemic levels.
The pandemic caused the U.S. government to create a wide variety of relief initiatives for both individuals and businesses, including the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act created financial benefits for businesses, such as the Payment Protection Program (PPP) and other small business loan programs, as well as tax credits like the employee retention credit (ERC).
The ERC gives businesses an opportunity to lower payroll taxes and keep their employees. Although the program has ended, qualifying employers can still claim the credit.
The following is your guide to the employee retention credit, including a helpful employee retention credit worksheet so you can calculate your exact credit.