ERC Key Takeaways
The Employee Retention Credit (ERC) related to the COVID-19 pandemic received a lot of attention while it was available. Here’s an overview of what to know:
- ERC was introduced with the Coronavirus Aid, Relief and Economic Security (CARES) Act
- It is a refundable payroll tax credit created to help businesses negatively affected by the coronavirus pandemic
- The IRS announced a moratorium on processing any ERC claims filed after January 31, 2024
- Experian Employer Services no longer provides services related to filing ERC. Learn more about how we help employers secure other available tax credits here
ERC Background
In response to the economic challenges brought forth by the COVID-19 pandemic, Congress introduced the CARES Act, enacted March 27, 2020, which contained the ERC. The purpose was to incentivize eligible businesses to maintain employees on their payroll and to sustain the business through the financial crisis caused by the pandemic. The Infrastructure Investment and Jobs Act retroactively ended the ERC program on Oct. 1, 2021, but businesses could retroactively claim the ERC for a time on their 2020 and 2021 payroll tax returns.
What was the ERC?
The ERC was a refundable payroll tax credit created by the CARES Act to help businesses negatively affected by the coronavirus pandemic. These businesses either experienced a significant decline in revenue or were impacted by government orders that limited their business activity. Eligible employers could claim a percentage of qualified wages paid to employees after March 12, 2020, and before Oct. 1, 2021.
ERC Moratorium
The IRS announced September 14, 2023 a moratorium on processing new ERC claims. Claims filed after January 31, 2024 will not be processed.
Working with Experian Employer Services
Experian Employer Services no longer provides services related to filing the ERC. To learn more about other employer tax credits such as the Work Opportunity Tax Credit, Disaster Zone Tax Credit and Family Medical Leave Act Tax Credit, visit our website and schedule a demo.
Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a federal tax credit designed to create a more diverse workforce by incentivizing employers to hire employees from specified target groups. To claim WOTC, eligibility criteria must be met. Read this guide to learn about eligibility requirements for each target group, the steps on how to claim WOTC, its benefits, and how a streamlined WOTC solution can help you overcome challenges to simplify this time-consuming and complex process.
Disaster Zone Tax Credits
Disaster relief tax credits help employers get back on their feet after qualifying disasters, such as wildfires, hurricanes, and earthquakes, render their locations inoperable. At Experian, our tax credit management team can help you claim relevant disaster relief tax credits to get your team back on track. If your organization is in a qualifying disaster zone, we can help you through each step of the claim process. You may be eligible for disaster zone tax credits, including the Employee Retention Tax Credit (ERTC), Paid Sick and Family Leave Credits, and similar credits.
Family Medical Leave Act Tax Credit
If you’re an employer who provides family and medical leave to your employees, you may be eligible for the Family Medical Leave Act (FMLA) Tax Credit. This tax credit is equal to a percentage of wages you pay to eligible employees who take time off for family and medical leave. Our suite of tools makes it easy to determine the eligibility requirements and fill out the necessary paperwork to receive the FMLA tax credit. With our tax credit management services on your side, applying for tax credits that can improve your ROI and protect your bottom line is easy.