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The Internal Revenue Service has issued guidance for employers claiming the 2020 employer retention tax credit. The tax credit is part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). It was created to help keep employees on the payroll despite experiencing economic hardships associated with the pandemic.
Employers can claim the tax credit if they:
- Paid qualified wages between March 12, 2020 – January 1, 2021; and
- Experience a suspension (full or partial) of their operations or a significant decline in gross receipts.
Employers that received a Paycheck Protection Program (PPP) loan can also claim the employee retention credit for 2020. However, employers must choose between claiming this credit or receiving PPP loan forgiveness. The PPP was created to help business keep their workforce employed during the pandemic.
The notice also clarifies employer eligibility and employee retention credit FAQs. There are also some retroactive changes which apply to 2020. Additional guidance will be published soon for 2021 changes.
Download the bulletin for more details.
This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.
National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.
