Employee Retention Tax Credit
Get the Credit You Deserve
Employee Retention Tax Credit
If you maintained and paid your staff qualified wages after March 12, 2020, your business might be eligible to claim the Employee Retention Tax Credit (ERTC). While eligibility and credit amount vary depending on when the business impacts occurred, the credit you receive may be able to infuse valuable money back into your operation.
What You Need to Know
- ERTC can be claimed retroactively through the filing of amended returns.
- Credit is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020 and before January 01, 2022.
- Recovery Startup Businesses can claim ERTC only for the third and fourth quarters of 2021.
- 2020 amended returns from Q2, Q3, and Q4 are all due by April 15, 2024, while 2021 amended returns for all quarters are due by April 15, 2025.
Please refer to IRS Website to learn more about the ERTC program.
Paychex Can Help
Paychex, our Payroll and HR Service provider is helping businesses claim their Employee Retention Tax Credit (ERTC).
- One of the only providers offering an ERTC service
- Gold medal recipient for Excellence in Technology Award for ERTC service
- Paychex clients, on average, have claimed this amount in tax credit
For more information about Paychex ERTC service, please visit their website.
Is Your Business Eligible?
Not every business is eligible for the Employee Retention Tax Credit. Your business is eligible if:
- Operations were partially or fully suspended under government orders due to COVID-19 and/or had a decline in percentage of gross receipts*
- Or, you qualify as a Recovery Startup Business. An RSB began operations after Feb. 15, 2020 and had annual gross receipts that did not exceed $1 million. Legislation in 2021 removed earlier eligibility restrictions for the fourth quarter of 2021, including the significant decline in gross receipts requirement.
* Various pieces of legislation during the pandemic changed the percentage rate. It was 50% in 2020 and 20% in 2021 from a comparable quarter in 2019 for existing businesses. Startups that were not around in 2019 would look at 2020 for a comparable quarter for 2021.
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What is Employee Retention Tax Credit?
The Employee Retention Credit (ERC) – sometimes called the Employee Retention Tax Credit or ERTC – is a refundable IRS tax credit for businesses and tax-exempt organizations that had employees and were affected during the COVID-19 pandemic.
How does the ERTC work?
The employee retention tax credit is a percentage of qualified wages paid to an employee. Several laws have changed the percentage based on which quarter the a business claims the credit. This fully refundable credit is applied to the portion of payroll taxes a business pays. For more information, please read the ERTC article in the Paychex Knowledge Center. (https://www.paychex.com/articles/compliance/employee-retention-credit)
Does the employee retention credit have to be paid back?
No. It is a refundable credit based on payroll taxes already paid by an employer.
How does my business claim ERTC?
Businesses should consult with their accounting professional or a payroll provider such as Paychex, which provides an ERTC Service to help retroactively identify and claim the credit by filing an amended Form 941.
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