ERC stands for employee retention credit. It’s a tax credit available for employers who have retained their employees on the payroll, even under the government-imposed COVID restrictions and other limitations during 2020 and 2021. You can be eligible for this reward if your business was operating during 2020 or 2021.
Considering the fact that your business will be required to lay off workers due to the implemented restrictions, you’ll be able to claim a tax credit provided that your business retained at least some of its employees. ERC for Texas businesses is a preferential point of interest that is applicable to employers who have retained their employees on the payroll.
Here is a brief of who can be eligible for claiming ERC or Employee Retention Credit in Texas.
- Your gross quarterly receipts saw a significant decline—50% or more in 2020 and 20% or more in 2021
If you have a declining business in the year 2020, you’ll be eligible for ERC. The same applies to 2021. You can qualify for ERC if you had a significant drop in your gross quarterly receipts. If your gross receipts have gone down 50% or more in the first half of 2020 and 20% or more in 2011, you’re eligible to claim ERC. You can seek help from a tax accounting firm that deals with government incentives provided under the CARES Act to check your eligibility for ERC.
- Your business was fully shut down by a government COVID mandate
If your business was required to shut down due to the COVID Act, you’re eligible for Employee Retention Credit. Some businesses were forced to shut down due to the restrictions, others just had to scale down their operations. You’re eligible for claiming ERC if your business was 100% closed.
- Your business suffered a partial suspension of business due to a COVID mandate that was more than nominal
You’ll be able to claim ERC if your business shut down a part of its operations but it was more than nominal. The government-imposed COVID restrictions were partially or completely in force for certain businesses. You’re eligible for claiming ERC if you experienced below average gross income due to the partial suspension of your business operations. Some businesses had to operate partially by maintaining their employees on the payroll. These businesses are eligible for claiming ERC.