The Employee Retention Credit (“ERC”) is a fully refundable tax credit against payroll taxes originally enacted as part of the CARES Act to encourage employers to continue paying employees despite financial hardship caused by the COVID-19 pandemic. The rules surrounding the ERC are quite complex, in part because the regulatory framework stems from multiple statutes and IRS Notices and due to the lack of clear and sufficient IRS guidance. Furthermore, some of the rules have even changed since its inception. For example, the Infrastructure Investment and Jobs Act enacted on November 15, 2021, retroactively eliminated the ERC for wages paid after September 30, 2021.
