The CARES Act Section 2301 creates a new employee retention credit (the Retention Credit) for wages paid from March 13, 2020 to December 31, 2020, by employers that are subject to closure or significant economic downturn due to COVID-19. The credit amount takes into account up to 50% of qualified wages, up to $10,000. Thus, the maximum Retention Credit amount is $5,000 per employee. The Retention Credit applies to:
To be eligible for the Retention Credit an employer must carry on a trade or business in 2020 that experiences one of the two following COVID-19-related occurrences:
(1) operations were fully or partially suspended on orders from a governmental authority due to COVID-19 (COVID-19 Shutdown), or
(2) the business experienced a 50% reduction in gross receipts for a calendar quarter as compared to the same calendar quarter in the prior year (Gross Receipts Decline).
Please not additional rules for eligibility:
*Please note that as information is updated and modified, terms and conditions are subject to change.