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How the Employee Retention Credit Works

The ERC allows eligible employers to claim a credit against the employer's share of Social Security taxes. For 2020, the credit was set at 50% of qualified wages, up to $10,000 per employee annually. In 2021, the credit was enhanced to 70% of qualified wages per quarter, with a maximum of $10,000 per employee per quarter1. This means businesses could potentially claim up to $7,000 per employee per quarter in 2021, leading to significant savings.

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