In response to the American economy reeling from the coronavirus (COVID-19) pandemic, the federal government recently signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act). Among other provisions, the CARES Act provides businesses suffering under the debilitating effects of the pandemic with unprecedented access to emergency loans.
Read more about CARES Act here.
The CARES Act creates an employee retention tax credit, which is designed to encourage eligible employers to keep employees on their payroll, despite experiencing economic hardship related to COVID-19.
Highlights include:
- Employers whose business has been financially impacted by COVID-19 may be eligible for an employee retention tax credit.
- The amount of the credit is 50% of qualifying wages paid, up to $10,000 in total.
- Employers can be reimbursed for the credit by reducing their payroll tax deposits.
- Eligible employers can also request an advance of the credit by submitting Form 7200.
Read more here: Employee Retention Tax Credits for Businesses Impacted by Coronavirus
Background information: In The Know – Understanding the Historic $2 Trillion Stimulus Package.
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