Employee Retention Credit (ERC) Tax Services

The Employee Retention Credit (ERC) provides economic relief through a refundable tax credit to eligible businesses that have kept their employees on payroll and/or incurred health plan expenses during the COVID-19 pandemic. The Consolidated Appropriations Act, 2021, extended the ERC through June 30, 2021, increased the credit value per employee, and amended the credit to allow employers that received a loan under the Paycheck Protection Program (PPP) to also claim the ERC both proactively and retroactively.

Employers need to navigate the legislative changes to the ERC and the potential for obtaining benefits of both the ERC and the PPP, especially related to the wages that can be applied to each program, qualified wage limits in 2020 and 2021, and the differences in calculating the ERC based on the total number of full-time employees.

ERC basics

Why EY

As one of the world’s largest tax advisory and compliance firms, Ernst & Young LLP (EY US) has significant employee retention credit experience dating back to Hurricane Katrina retention credits in 2005. EY US has the technical know-how, subject‑matter resources and digital platforms to quickly assist businesses in qualifying, computing and claiming the ERC. We bring the multifunctional tax technical capabilities and experience of our Employment Tax, Tax Credits and Compensation and Benefits practices to assist our clients.

EY US is at the forefront of the ERC. Our National Tax office has worked closely with government agencies to fully understand and assist employers with the complexities of this credit. We have experience assisting hundreds of employers across many industries, including essential businesses, in evaluating eligibility and claiming the credit.

We bring the right combination of technical, project management, qualified credits and incentives, benefits, and employment tax experience along with a deep knowledge of your business — all key components to a successful engagement. Our experience assisting employers with the complexities involved in gathering the right data and properly assessing eligibility for the ERC includes helping our clients with:

1. Applying complex rules to our clients’ unique business situations

• Determining whether the company is an eligible employer (e.g., partial suspension of operations or significant decline in gross receipts)
• Identifying impacts based on company policies, customer considerations and disruptions to the supply chain
• Determining methods for identifying, qualifying and quantifying time employees are not providing services

2. Navigating the nuances involved with properly calculating the ERC

• Tracking and applying changing government orders by geography and industry
• Evaluating circumstances that create a partial suspension of operations for a trade or business by location
• Quantifying wages not related to the provision of services for employees in varying situations, including reduced hours and furlough populations