The CARES Act, Consolidated Appropriations Act, and American Rescue Plan have created and expanded numerous programs to assist businesses with navigating through the COVID-19 pandemic. One of the more prevalent programs from these laws is the Employee Retention Credit (ERC). As companies continue to pursue these programs, it is important to understand the impacts that utilizing these programs may have on other incentives, including the R&D Tax Credit.
Understanding the ERC
The Employee Retention Credit (ERC) is a federal incentive designed to keep employees on payroll during the pandemic. It was first introduced in the CARES Act and subsequently enhanced in the Consolidated Appropriations Act of 2021 and the American Rescue Plan. The ERC offsets the employer portion of payroll tax and is refundable. Eligibility is determined on a quarterly basis, and there were changes to eligibility requirements in 2021.
To learn more about the ERC and how it interplays with the R&D Tax Credit, watch our webinar. Contact our R&D Credit Services team to discuss options for your clients or review the information shared in the presentation.