Employee Retention Credit for Employers Subject to Closure Due to COVID-19
- All eligible employers are permitted to claim a 50 percent credit against wages paid.
- Credit provided for first $10,000 of compensation, including health benefits, paid to an eligible employee.
- The credit offsets employment taxes otherwise paid during a calendar quarter (reduced by any other credits used) with any excess refundable by the federal government.
- Employer is eligible if operations fully or partially suspended during a calendar quarter due to a government order or gross receipts for a calendar quarter are less than 50 percent of gross receipts from the same quarter in the prior year (ending when they are 80 percent).
- Credit is based on qualified wages paid to the employee.
- If greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related circumstances.
- If eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shut-down order.
The credit applies to tax-exempt organizations