The Employee Retention Credit was covered as part of our Stay Strong Webinar on December 30, and now we have additional information to share.
To determine whether or not your company is eligible for Employee Retention Credits—which can be up to $14,000 per employee—here is a breakdown of the requirements for 2020 and 2021:
This credit could be significant for employers. For example, organizations with 20 employees each earning $40,000 or more per year could earn $14,000 per employee or a total credit of $280,000.
Our RDG+Partners Payroll and Benefits team will host another Stay Strong Webinar next week to cover more details about this credit, related strategies and how we can assist you. Stay tuned for details.
For payroll paid during the covered period is it based on the date paid or is it based on when the payroll was incurred? Is there a limit on how much an employee can make compared to the most recent quarter if it is not in excess of $100,000 on an annual basis? Is rent, utilities, interest, etc. in arrears eligible for forgiveness if paid during the covered period? What about amounts paid in advance? For employees laid off prior to 4/27 and hired back by 6/30 is there a time period they must remain employed in order to avoid a reduction in loan forgiveness? How do you define FTE? Is it 30, 35 or 40 hours? We know non-mortgage interest is a covered cost, but is it also eligible for forgiveness? How do you measure the 25% reduction amount for payroll? For example, from 1/1/20 to 3/31/20, do you look at number of hours, rate per hour, or just total compensation during that period? If you bonused people during Q1 of 2020 that is not a part of their normal compensation, is that included when looking at the 25% reduction for payroll? What is “transportation” with regards to being a utility? Does this include mileage, gas for vehicles, etc.? Does “rent” include all leases (building, vehicle, equipment, copiers)? If not, what does it include? If a business hires new employees after 2/15/20, can they be included in the FTE count for the 8-week period? Are there any restrictions on compensation (increases) for related parties (mother, father, brother, sister, child, etc.)?
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