2020 Highlights:
- An employer becomes eligible if they:
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- can demonstrate a 50% or more decline in gross receipts in any quarter of 2020, compared to the same quarter in 2019
- eligibility ends the last day of the first subsequent quarter when gross receipts return to at least 80% compared to the same quarter in 2019
- Or, their operations were fully or partially suspended due to a direct government mandate
- eligibility ends the date the government mandates are removed
- can demonstrate a 50% or more decline in gross receipts in any quarter of 2020, compared to the same quarter in 2019
- Eligible employers (less than 100 employees in 2019) can claim a tax credit for 50% of qualified wages (corresponding to eligibility dates starting March 12, 2020, through December 31, 2020)
- Eligible wages limited to $10,000 per employee per year
- Tax credit limited to $5,000 per employee per quarter
- Cannot use the same wages that were used for PPP Forgiveness
2021 Changes:
- An employer becomes eligible if they:
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- Can demonstrate a 20% or more decline in gross receipts in any quarter of 2021, compared to the same quarter in 2019
- eligibility ends the last day of the subsequent quarter when gross receipts return to at least 80% compared to the same quarter in 2019
- Or, their operations were fully or partially suspended due to a direct government mandate
- eligibility ends the date the government mandates are removed
- Can demonstrate a 20% or more decline in gross receipts in any quarter of 2021, compared to the same quarter in 2019
- Eligible employers (less than 500 employees in 2019) can claim a tax credit for 70% of qualified wages through December 31, 2021
- Eligible wages limited to $10,000 per employee per quarter.
- Tax credit limited to $7,000 per employee per quarter.
- Businesses that started on 2/15/21 or later are qualified for up to $50,000 in credit per quarter. *
- Severely Financially Distressed employers (gross receipts down 90% v. 2019) can take all paid wages into consideration. *
*These changes are not retroactive and apply only to the 3rd and 4th quarters of 2021.
Contact your S&S representative or one of our offices with questions about the Employee Retention Credit.