The Employee Retention Credit (ERC) is a tax credit introduced as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help businesses impacted by the COVID-19 pandemic. It is designed to encourage employers to keep their employees on their payroll, rather than laying them off or furloughing them, by providing a credit against the employer’s share of Social Security tax.
In New York, the ERC has had a significant impact on unemployment benefits, as it has allowed many businesses to retain their employees and avoid layoffs, thereby reducing the number of people who are eligible for unemployment benefits.
To qualify for the ERC, a business must have experienced a full or partial suspension of operations due to a government order related to COVID-19, or have seen a significant decline in gross receipts. If a business meets these criteria, it may be eligible for a credit of up to 50% of the qualified wages it pays to its employees, up to a maximum credit of $5,000 per employee.
The ERC has been a valuable resource for many businesses in New York, helping them to weather the economic downturn caused by the pandemic and keep their employees on the payroll. This has not only benefited the employees, who have been able to keep their jobs and steady income, but it has also benefited the state’s economy, as it has helped to reduce unemployment and keep money flowing through the local economy.
While the ERC has had a positive impact on unemployment benefits in New York, it is important to note that it is only available for a limited time and is set to expire at the end of 2021. This means that businesses will need to find other ways to keep their employees on the payroll, such as through cost-cutting measures or government assistance programs.
Overall, the Employee Retention Credit has been a useful tool for businesses in New York looking to retain their employees during the COVID-19 pandemic. It has helped to reduce unemployment and keep money flowing through the local economy, while also providing a much-needed lifeline to businesses struggling to survive the economic downturn.
