Employee Retention Credit Deadline July 31
As a reminder, employers whose business has been financially impacted by COVID-
19 can take advantage of the Employee Retention Credit, a refundable tax credit
designed to encourage businesses to keep employees on their payroll. The credit is
worth up to 70 percent of up to $10,000 in wages paid by an employer. Employers
that are eligible for the credit for the first and second quarters of 2020 can apply
for the credit when they file their second-quarter filing of Form 941, Employer’s
Quarterly Federal Tax Return, which is due July 31.
The credit is available to all employers regardless of size, including tax-exempt
organizations. There are only two exceptions: State and local governments and
their instrumentalities and small businesses that make small business loans.
Qualifying wages are based on the average number of a business’s employees in
2019 and are divided into employers with fewer than 100 employees and
employers with more than 100 employees.
When employers report their qualified wages on Form 941, they can reduce their
required deposits of payroll taxes withheld from employees’ wages by the amount
of the credit.
For more tax information, click here.
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