The Paycheck Protection Program supplied forgivable loans to businesses with fewer than 500 employees. If a business took advantage of the program, they were barred from taking advantage of the second incentive, the Employee Retention Credit (ERC). Businesses who borrowed a PPP loan can now go back and claim the ERC for 2020.
The ERC is a refundable payroll tax credit that was only available to taxpayers who either:
An employer can claim a refundable payroll tax credit of up to $5,000 per employee for wages paid between March 12 and December 31, 2020, but only for wages paid during a calendar quarter in which the business is either:
Shut down by government order
Experiencing a large drop in year-over-year gross receipts
ERC CHANGES 2020 to 2021