The IRS issued guidance for employers claiming the employee retention tax credit under the CARES Act. The guidance includes clarifications and describes retroactive changes relating to expanded eligibility.
Background: For 2020, the employee retention credit can be claimed by employers who paid qualified wages after March 12, 2020, and before Jan. 1, 2021, and who experienced a full or partial suspension of their operations or a significant decline in gross receipts.
The Credit: It is equal to 50 percent of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020. The maximum credit available for each employee is $5,000 in 2020.
