Q. What is Employee Retention Tax Credit?

 

A. The Employee Retention Credit under the CARES Act encourages businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

Q. How much is the Potential Credit?

 

A. For 2020, Qualified employers can receive a maximum credit of $5,000 per employee.

 

A. For 2021, the tax credit is equal to 70% of qualified wages that eligible employers pay their employees. “70% of wages but capped at $7,000 per employee, per quarter”

Q. How to Qualify as an Employer?

 

A. For 2020, For Q1, Q2, Q3 or Q4 employer’s operations were full or partially suspended due to orders from government authority limiting activity due to COVID-19.Experienced a significant decline in gross receipts, defined as less than 50% of gross receipts for the same calendar quarter in 2019. Business qualifies due to suspension of operations. (Since most everyone was forced to shut down or reduce operations at some point)

 

A. For 2021, For Q1, Q2 or Q3 employer’s operations were full or partially suspended due to orders from government authority limiting activity due to COVID-19. Experienced a significant decline in gross receipts defined as less than 80% of grossreceipts for the same calendar quarter in 2019.

Q. I could not resolve my question using FAQs. How can I connect withIRS for additional assistance?

 

A. You may visit IRS.gov/coronavirus/employee-retention-credit or use this link below.

 

Employee Retention Credit | Internal Revenue Service (irs.gov)

Q. What IRS form should I use?

 

A. IRS Form 941 is the form you regularly file quarterly with your payroll. To claim the Employee Retention Credit, utilize line 11C in Form 941, and Worksheet 1 that it references is on the last page of the Form 941 instructions. Utilize the Worksheet to calculate the tax credit. 941 is the regular form but for obtaining the credit will need to use 941X or Form 7200.

 

https://www.irs.gov/forms-pubs/about-form-941

Click "Lets Calculate" to learn if you qualify

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