The CARES Act, signed into law by President Trump on March 27,
2020, includes an unexpected employee retention credit that is
available to employers.
The Employee Retention Credit (the ERC) is a credit against an
employer's portion of payroll tax for an eligible business that
is forced to suspend or close operations due to COVID-19, or
otherwise has a significant revenue decrease, and continues to pay
its employees while not currently working.
How the Credit Works
For each quarter that a business is eligible, the business will
receive a refundable credit against its 6.2 percent (Social
Security and Railroad Retirement) employer portion of the payroll
tax equal to 50 percent of "qualified wages" paid.
