Employee Retention Credit: Comprehensive FAQs for Businesses

The IRS has issued a series of FAQs on the employee retention credit that is contained in the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act.

employee retention creditThe FAQs cover detailed eligibility requirements, determining qualified wages, how to claim the employee retention credit, and other valuable information for employers.

Read the IRS FAQs on the employee retention credit here.

Basics of the tax credit

The employee retention credit is a refundable payroll tax credit for 50% of wages paid by eligible employers, including nonprofits, to certain employees during the Coronavirus crisis. The tax credit is available to employers whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel, or group meetings. Employers are also eligible for the credit if they have experienced a greater than 50% reduction in quarterly receipts, measured on a year-over-year basis. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an employer for qualified wages paid to any employee is $5,000.

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