Estimate your business tax refund for 2020 and 2021
2020 (Full Year)
2021 (Per Quarter)
1 Quarter
2 Quarters
3 Quarters
Note: Most businesses qualify for Q1, Q2, and Q3 of 2021.
For 2020, this is the total per year. For 2021, this is the average per quarter.
Estimated ERC Refund:
$0.00
Understanding the Employee Retention Credit (ERC)
The Employee Retention Credit (ERC) is a powerful stimulus program designed to help businesses that retained their employees during the COVID-19 pandemic. This refundable tax credit is available to eligible businesses and tax-exempt organizations that saw a significant decline in gross receipts or were subject to full or partial government shutdowns.
2020 vs. 2021 Rules
The rules for ERC changed significantly between the two years, which is why accurate calculation is essential:
For 2020: The credit is 50% of qualified wages, up to a maximum of $5,000 per employee for the entire year.
For 2021: The credit was increased to 70% of qualified wages, up to a maximum of $7,000 per employee per quarter (for Q1, Q2, and Q3). This means a potential $21,000 per employee for 2021.
Eligibility Requirements
To qualify, your business must meet one of two main criteria:
Revenue Decline: In 2020, a 50% decline in gross receipts compared to the same quarter in 2019. In 2021, only a 20% decline is required.
Government Mandated Shutdowns: Your operations were fully or partially suspended due to a government order limiting commerce, travel, or group meetings.
Calculation Example
If you had 10 employees in Q1 2021 and paid each of them at least $10,000 in qualified wages:
Wages: $10,000 per employee
Credit Rate: 70% ($7,000 credit per employee)
Total Credit: 10 employees x $7,000 = $70,000 for that single quarter.
Disclaimer: This calculator provides an estimate based on the data provided. ERC eligibility is subject to complex IRS rules, including interactions with PPP loans. Consult with a tax professional before filing.
function updateERCInstructions() {
var year = document.getElementById("ercYear").value;
var quarterDiv = document.getElementById("quarterSelection");
var wagesLabel = document.getElementById("wagesLabel");
var wagesHelp = document.getElementById("wagesHelp");
if (year === "2021") {
quarterDiv.style.display = "block";
wagesLabel.innerText = "Average Qualified Wages per Employee per Quarter (Max $10,000):";
wagesHelp.innerText = "For 2021, you can claim 70% of wages up to $10,000 per employee per quarter.";
} else {
quarterDiv.style.display = "none";
wagesLabel.innerText = "Average Qualified Wages per Employee for 2020 (Max $10,000):";
wagesHelp.innerText = "For 2020, you can claim 50% of wages up to $10,000 per employee for the full year.";
}
}
function calculateERC() {
var year = document.getElementById("ercYear").value;
var employeeCount = parseFloat(document.getElementById("employeeCount").value);
var avgWages = parseFloat(document.getElementById("avgWages").value);
var quarters = parseInt(document.getElementById("ercQuarters").value);
var resultDiv = document.getElementById("ercResult");
var resultAmount = document.getElementById("ercAmount");
var resultBreakdown = document.getElementById("ercBreakdown");
if (isNaN(employeeCount) || employeeCount <= 0 || isNaN(avgWages) || avgWages 10000 ? 10000 : avgWages;
var totalCredit = 0;
var rate = 0;
if (year === "2020") {
rate = 0.50; // 50%
totalCredit = employeeCount * cappedWages * rate;
resultBreakdown.innerText = "Calculation: " + employeeCount + " employees × $" + cappedWages.toLocaleString() + " (max wages) × 50% credit rate.";
} else {
rate = 0.70; // 70%
totalCredit = (employeeCount * cappedWages * rate) * quarters;
resultBreakdown.innerText = "Calculation: (" + employeeCount + " employees × $" + cappedWages.toLocaleString() + " (max wages) × 70% credit rate) × " + quarters + " quarter(s).";
}
resultAmount.innerText = "$" + totalCredit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resultDiv.style.display = "block";
// Smooth scroll to result
resultDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' });
}