ERC Employee Retention Credit – Receive up to $26k per Employee in 2023

U.S. businesses that continued to pay employees while their operations were shut down by the COVID-19 pandemic, or that had significant declines in quarterly gross receipts in 2020 and/or 2021, may be eligible for the Employee Retention Credit (ERC tax credit).

This credit is a refundable payroll tax credit that can be claimed retroactively by eligible employers on an original or adjusted tax return for the period covered. The ERC tax credit that can be as high as $5,000 per employee in 2020 and as high as $21,000 per employee in 2021 for a combined maximum of $26,000 per eligible employee.

Employers that received PPP loans are still eligible for the ERC tax credit as long as the same wages are not double counted for both programs.

Here are some things you should know to file for your Employee Retention Credit in 2023

Employers subject to full or partial shutdowns in 2021 or 2021 because of government orders that restricted business activity or employers that had significant declines in quarterly gross receipts as compared to their corresponding 2019 quarterly gross receipts due to the Covid pandemic are eligible employers under this program.

Employers can still take advantage of the ERC’s refundable payroll tax credits in 2023 for qualified wages paid to part-time and full-time W-2 employees during the period from March 13, 2020 to September 30, 2021. The employer may only calculate the credits on the first $10,000 of wages and health plan costs paid to each employee during each credit-eligible quarter.

How do you apply for Employee Retention Credit

Eligible businesses can claim the ERC tax credit by filing an amended Quarterly Federal Payment Tax Return (Form 941X) for each 2020 or 2021 quarter in which they were eligible employers.

Employers should be cautious about third-party offers to claim the Employee Retention Credit even though they may not be eligible. The IRS has issued a renewed warning about claims for the Employee Retention Credit. False claims increase compliance risk for businesses and those claiming the credit incorrectly. See IRS News Release IR-2023-40 and COVID Tax Tip 20222-170 for more details.

Possibly because of this justified caution, many companies still have not evaluated whether they qualify for this generous tax credit. The safest route for doing so is to avoid ERC promoters formed solely to exploit this generous tax incentive and work instead with established tax specialists with successful track records for claiming this and other tax credits and incentives without running afoul of the IRS.


See how much your business may qualify for in ERC Tax Credits and hundreds more federal, state and local tax incentives.