Taxpayers with eligible employers are eligible for an Employee Retention Credit (ERTC) for the years 2020 and 2021. There is no limit on how many taxpayers can receive the credit, or how many can be claimed in a single year. The 2020 ERTC and 2021 ERTC are available to both small and large businesses.

The employer must have an annual payroll of $500,000 or less. The employer also has to pay the tax and file a return before the end of the calendar year in which the qualified wages were paid. Qualified Employee Retention Credit wages include all wages and salaries that employees received from employers for services that are included in taxable wages, including, but not limited to, wages, salaries, tips, fees, bonuses, commissions, rents, and other compensation.

To be eligible for the 2020 ERTC and the 2021 ERTC, an employer's gross monthly wages had to equal or exceed the threshold amounts set forth in Publication 575, Employee Retirement Benefits and Tax Administration. The threshold amounts for 2020 are $400,000 or less for the entire year and $150,000 for the last three months of the year. The threshold amounts for the 2021 ERTC are $1 million or less for the entire year and $300,000 or less for the last three months of the year.