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the employee retention credit ERC is a tax credit created by the carers act in 2020 to encourage employers to retain employees during the covid-19 pandemic it was extended and expanded by subsequent legislation to qualify for the ERC an employer must have experienced a docHub decline in gross receipts or a full or partial suspension of business operations due to a government order for 2020 the decline in gross receipts must have been at least 50 percent compared to the same quarter in the prior year while for 2021 the decline must have been at least 20 percent additionally employers with an average of 500 or fewer full-time employees during 2019 may claim the credit for wages paid to all employees During the period of business disruption while larger employers may only claim the credit for wages paid to employees who were not providing Services regarding PPP loans an employer may still qualify for the ERC the IRS typically processes tax credits within a few weeks of filing but the