Employee Retention Tax Credit:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act created a new employee retention tax credit for employers who are closed, partially closed, or experiencing significant revenue losses as a result of COVID-19. For a guide to the Employee Retention Tax Credit from the US Chamber of Commerce, click HERE.
Who is ELIGIBLE?
Private employers, including non-profits, carrying on a trade or business in 2020 that:
With respect to tax-exempt organizations under 501(c) of the tax code, the requirement to be partially or fully suspended applies to all operations of the organization.
Employers who receive a Paycheck Protection Program (PPP) loan are not eligible for a tax credit. To learn more about PPP loans, visit Paycheck Protection Program
How much is the TAX CREDIT?
This new employee retention tax credit is a 50% tax credit for the first $10,000 of compensation, including the employer portion of health benefits, for each eligible employee.
WHICH EMPLOYEES COUNT toward eligibility?
How is the CREDIT PAID?
The refundable credit is applied against the employer portion of payroll taxes. The Treasury Department will develop a process for employers to receive an advance payment of the tax credit.
The Internal Revenue Service will issue further guidance and mange the ERTC process. Please contact the IRS with specific questions.