Who Is Not Eligible For ERC?
The Employee Retention Credit (ERC) is a refundable tax credit introduced as a part of the CARES Act in 2020 to help businesses affected by the COVID-19 pandemic. Later, the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021 expanded the credit to cover more businesses. In order to qualify for the ERC, businesses must meet the ERC eligibility 2021 criteria. Let’s discuss who is not eligible for the ERC. ERC Uneligibility Government entities Government entities are not eligible for the ERC guidance. This includes federal, state, and local governments and any agency or instrumentality thereof. This exclusion also applies to any organization exempt from taxation under Section 115 of the Internal Revenue Code. Businesses that received a Paycheck Protection Program (PPP) loan With some exceptions, businesses that received a PPP loan are generally not eligible for the ERC. Under the original CARES Act, businesses could not receive both a PPP loan and the ERC.