Who can Claim Employee Retention Credit in California?

The CARES Act was implemented in March 2020 by the Federal government as an initial response to the problems caused by COVID restrictions. Two programs were implemented under the CARES Act, PPP and ERC. Of these two, ERC can be of great help for employees and businesses that are affected by COVID guidelines. 

ERC is a Federal government program to encourage employers to retain their employees on the payroll. You can Click here to learn more about ERC and its eligibility criteria. ERC can be claimed by employers across all industries in California, if their businesses have been affected by COVID restrictions one way or another way. It doesn’t matter which industry your business belongs to. If you meet the eligibility criteria, your business can qualify for ERC.

Here are some common businesses that claim Employee Retention Credit in California.

  • Healthcare

The health care sector has been significantly affected by COVID restrictions. There were reports indicating that it can end up cutting healthcare jobs by 20%. Many small business owners in this sector have opted to retire early due to fear of bankruptcy.

  • Manufacturing industry

Manufacturing was one of the first industries that were impacted by COVID restrictions. The factory workers were terminated from their job to reduce the workforce. Many small business owners had to shut down their businesses.

  • Educational institutions

The California State University and the California Community Colleges were required to reduce their hiring in order for them to become financially stable. It has been reported that most educational institutions in California are struggling to retain their employees due to the COVID restrictions.

  • Transportation services

COVID and its restrictions have affected the transportation industry significantly. Many small business owners in this sector are forced to lay off their workforce to reduce business expenses and avoid bankruptcy. They can file for ERC to retain their workforce.

  • All retail stores

All kinds of retail stores have been affected by COVID restrictions. They were challenged in many aspects. Many small store owners were forced to shut down.

  • Restaurants

Restaurants were one of the industries that were significantly affected by COVID restrictions. Many restaurant owners have been forced to reduce their workforce so as not to end up going bankrupt under the COVID restrictions.

  • Home care services

The home care industry also has been significantly affected by the restrictive COVID requirements. Many personal care business owners have been forced to shutter their businesses due to the COVID restrictions and lack of funds for the renewal process.

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