Navigating ERC Eligibility: A Thorough Guide for Businesses

Jennifer Hudson
June 10, 2023

Navigating ERC Eligibility: A Thorough Guide for Businesses

The journey through the global pandemic has underscored the critical role of financial sustainability for businesses, especially when faced with unprecedented economic headwinds. Amidst the storm, the Employee Retention Credit (ERC) emerged as a beacon of hope for many enterprises. Instituted by the government, the ERC serves as a refundable tax credit aimed at alleviating the financial burdens borne by businesses while encouraging workforce retention during these testing times. The essence of the ERC lies in its objective to provide direct financial relief, thereby fostering economic stability and recovery.

The evolution of the ERC over time has seen various amendments to its eligibility criteria, each iteration aimed at fine-tuning the provision to suit the changing economic landscape better. These amendments, while beneficial, necessitate a thorough understanding on the part of employers to ensure they are leveraging the ERC to its fullest potential. The nuances of eligibility criteria, the process of claim submission, and the subsequent financial relief underscore the importance of a well-informed approach to navigating ERC eligibility.

The forthcoming discourse aims to shed light on the multifaceted eligibility criteria of the ERC, delineate the process involved in claiming this credit, and address common queries that may arise along the journey. As we delve deeper into ERC eligibility, we'll also explore how New York Savings is a reliable ally for businesses, guiding them through the labyrinth of ERC claims towards attaining financial relief.

Key Takeaway
  • The ERC is a governmental initiative providing a refundable tax credit to businesses, aiding employee retention during the pandemic-induced economic turmoil.
  • Over time, amendments to ERC eligibility criteria highlight the importance of staying updated to maximize the benefits derived from this provision.

Detailed Exploration of Eligibility Criteria

The roadmap to availing the benefits of the Employee Retention Credit hinges on a thorough comprehension of the eligibility criteria. These criteria are tailored to encapsulate businesses' varying operational and financial scenarios. A deep dive into these determinants unveils the facets companies must consider to ascertain their eligibility for the ERC.

  1. Eligibility Time Frame: The ERC applies to eligible employers who have paid qualified wages to some or all employees from March 12, 2020, to January 1, 2022. This period symbolizes the height of economic disruptions triggered by the pandemic, warranting governmental intervention through financial relief programs such as the ERC.
  2. Business Operations: The operational status of a business during specific periods significantly influences ERC eligibility. Specifically, employers can claim the ERC if they experienced a full or partial suspension of their business operations during a calendar quarter due to governmental orders limiting commerce, travel, or group meetings in response to COVID-19.

How it Works

  1. Significant Decline in Gross Receipts: The financial health of a business, as reflected through its gross receipts, is another pivotal eligibility criterion. A marked decline in gross receipts during 2020 or the first three quarters of 2021 qualifies a business for the ERC. The specifics entail that in 2021, businesses and tax-exempt organizations with W-2 employees experiencing a substantial decline in gross receipts are eligible. In 2020, a decline of at least 50% compared to the same quarter in 2019 was the benchmark for eligibility.
  2. Employee Wages and Employer Size: The ERC eligibility also orbits around the nexus of employee wages and employer size. Employers need to meticulously determine which wages qualify for the credit, significantly since having more than 100 full-time employees can narrow down the spectrum of qualifying wages.
  • Highlight the assistance New York Savings provided in identifying qualifying wages and navigating the complex landscape of ERC eligibility.

Check My Eligibility

  1. Special Qualification: To further extend financial relief, the “Recovery Startup Business” qualification provision was introduced in the latter part of 2021, adding another layer to the ERC eligibility matrix.

Navigating the ERC Process The pathway to claiming the ERC entails a structured process that requires meticulous attention to detail. New York Savings simplifies this process, ensuring a seamless journey from the eligibility call to receiving the refund.

  1. Eligibility Call: The journey commences with an eligibility call where ERC experts from New York Savings gauge the business's eligibility and estimate the expected amount.
  2. Document Submission: After the eligibility call is the document submission phase. New York Savings provides a portal for easy document uploads, guiding businesses through the required paperwork and conducting a thorough analysis to ensure a seamless process.
  3. Refund Receipt: With the paperwork in place, New York Savings handles the submission of documents to the IRS, paving the way for businesses to receive their refunds. The emphasis is on a hassle-free experience, allowing companies to focus on their core operations while awaiting their check.

This segment delves deeper into the eligibility criteria, shedding light on the various facets that influence ERC eligibility. It also transitions into an overview of the ERC claim process facilitated by New York Savings, elucidating how businesses can easily navigate this process. The internal links provide avenues for readers to explore further and engage with the services offered by New York Savings.

Commonly Asked Questions

A venture into ERC eligibility often sparks many questions among business owners. Addressing these queries is pivotal in equipping businesses with the knowledge to navigate the ERC process confidently. Here, we delve into some common inquiries, as fielded in the FAQ section of New York Savings.

  1. Qualification Despite Remaining Open: Many wonder if remaining open during the pandemic affects their eligibility. To qualify, a business must have been negatively impacted in specific ways, such as government-mandated shutdowns or a notable reduction in gross receipts.
  2. Coverage Period of the ERC: The ERC covers eligible wages paid to W-2 employees from March 13, 2020, through September 30, 2021, illuminating the specific timeframe for businesses to claim this credit.
  3. ERC and the CARES Act: The ERC was birthed through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, underscoring its role as a financial relief measure amidst the COVID-19 pandemic.
  4. Claim Deadlines: With deadlines set for April 15, 2024, for 2020 eligible quarters and April 15, 2025, for 2021 suitable quarters, businesses must mark these dates and ensure timely submission of their claims.
  5. Receiving the ERC Refund: The process culminates in receiving a cash refund from the IRS, issued based on qualifying quarters, thus providing tangible financial relief to eligible businesses.


Key Information:
  • What is the coverage period for the ERC program?
  • The ERC program covers eligible wages paid to W-2 employees from March 13, 2020, to September 30, 2021, for eligible employers.
  • How is the ERC refund processed?
  • The ERC refund is processed as a cash refund issued through checks based on qualifying quarters. The reviews are sent by mail from the IRS to the eligible businesses.
  • What are the deadlines for claiming the ERC?
  • For eligible quarters in 2020, the deadline for claiming the ERC is April 15, 2024. For suitable quarters in 2021, the deadline is April 15, 2025.


Navigating the terrain of ERC eligibility necessitates understanding the criteria, meticulous preparation, and leveraging expert guidance. This guide has endeavored to elucidate the eligibility criteria, the process of claiming the ERC, and addressing common queries, aiming to equip businesses with the requisite knowledge to navigate this pathway. The role of New York Savings as a dependable ally in this journey highlights the essence of expert guidance in ensuring a seamless experience in claiming the ERC.

With a clearer understanding of ERC eligibility and the process involved, businesses are better positioned to leverage this financial relief measure as a stepping stone toward economic stability and recovery in the post-pandemic era. We invite you to explore your eligibility and embark on the journey to claiming your Employee Retention Credit with the support of New York Savings.

Check My Eligibility

This final segment encapsulates common queries regarding ERC eligibility and provides a concise conclusion that encapsulates the key points discussed in the article. It also reiterates New York Savings' support to businesses in navigating the ERC process, with internal links guiding readers to relevant sections on your website for further exploration and action.

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