The Employee Retention Credit (ERC) is a tax credit introduced in response to the COVID-19 pandemic to encourage employers to keep employees on their payroll. The ERC was initially introduced as part of the CARES Act in March 2020 and has since been extended and expanded by subsequent legislation.

The ERC is a refundable tax credit that eligible employers can claim against certain employment taxes, including the employer's share of Social Security and Medicare taxes. Eligible employers can claim a credit of up to 70% of qualified wages paid to employees, up to a maximum credit of $7,000 per employee per quarter, for wages paid between March 13, 2020, and December 31, 2021.

To be eligible for the ERC, an employer must have experienced a significant decline in gross receipts or been fully or partially suspended due to a government order related to COVID-19. There are also specific rules and limitations depending on the size of the employer and the wages paid to employees.

The ERC is a valuable tool for eligible employers to help retain employees and offset some of the financial challenges caused by the pandemic.