The CARES Act includes an Employee Retention Tax Credit (ERTC) which would:
- Provide a fully refundable tax credit of 50% of $10,000 in qualified wages and the allocable portion of health insurance to the qualified wages paid such employee who remains on an employer’s payroll:
- For employers with up to 100 employees any wages and the allocable portion of healthcare qualify;
- For employers with more than 100 employees only those wages and the allocable portion of healthcare that exceeds the value of the work and/or time worked qualify.
- Defines eligible employers as any employer who’s business during a calendar quarter:
- Fully or partially was suspended during the calendar quarter due to an order from a governmental authority limiting commerce, travel, or group meetings; or
- Beginning with the first calendar quarter after December 31, 2019 an employer had gross receipts that were 50% less for the same calendar quarter then in the previous year;and
- Ending with the calendar quarter following the first calendar quarter after gross receipts are 80% greater then the same calendar quarter in the prior year.
- Makes both for-profit and not-for-profit employers eligible, but not state or local governments.
- Employers who receive a loan under the Paycheck Protection Program are not eligible for the employee retention tax credit.