The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)

Employee Retention Credit

The CARES Act provides eligible employers a refundable credit against payroll tax liability equal to 50% of the first $10,000 in wages per employee (including health plan benefits). Eligible employers must have carried on a trade or business during 2020 and satisfy one of two tests:

• Have a business fully or partially suspend operations due to orders from a government entity, thereby limiting commerce, travel or group meetings, or;
• Experience a year-over-year reduction in gross receipts of at least 50%.

The Employee Retention Credit is effective for wages paid between March 12, 2020 and before January 1, 2021. Additional rules apply to employers that have more than 100 full-time employees.