What is the eligibility for Employee Retention Credit?
116 views | Last modified 7/6/2020 9:25:29 AM EST | Added by TaxBandits Team

Applicable To
94X 1099 W-2 ACA W-4

The Coronavirus Aid Relief and Economic Security (“CARES”) Act provides eligible employers with a refundable payroll tax credit for certain wages paid. The credit is equal to 50% of up to $10,000 of qualified wages paid to employees after March 12, 2020, and before January 1, 2021
 
Below is the eligibility criteria for Employee Retention Credit

  •  Employers, including tax-exempt organizations, that do not have a Paycheck Protection Program (“PPP”) loan. Employers who repay a PPP loan by May 18, 2020, are considered not to have had a loan.  
  •  Employers who operate a trade or business during the calendar year 2020 and experience either:  

                (1) the full or partial suspension of the operation of their trade or business during any calendar quarter because of governmental orders limiting commerce, travel, or group meetings due to COVID-19, or  
                (2) a significant decline in gross receipts. 

  •  Governments, self-employed persons, and household employers are not eligible for this credit.

 
Eligible employers can get immediate access to the funds by reducing employment tax deposits they are otherwise required to make. Or, if the employer’s employment tax deposits are less than the credit, the employer can get a refund from the IRS by filing Form 7200.
 

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