Mar 30, 2021
The IRS issued guidance for employers claiming the employee retention credit for calendar quarters in 2020.
Who Can Claim the Credit
Employees who can claim the Employee Retention Credit for 2020 are those that paid qualified wages after March 12, 2020, and before January 1, 2021, and who experienced a full or partial suspension of their operations or a significant decline in gross receipts.
The Credit Amount
The credit 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.
Employees Who Got PPP Loans
A significant change for 2020 applies to eligible employers that received a Paycheck Protection Program (PPP) loan. They can now claim the employee retention credit. However, they can’t count the same wages to seek forgiveness of the PPP loan and calculate the employee retention credit. The IRS will release additional guidance soon addressing changes for 2021. For answers to common questions, see IRS Notice 2021-20 PDF
