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Click here to go back-COVID-19 relief: Overview of the CARES Act-
The CARES Act creates a new payroll tax credit for employers that pay wages when:
- Their operations are partially or fully suspended because of certain government orders related to the COVID-19 pandemic, or
- Their gross receipts have declined by more than 50% compared to the same quarter in the prior year.
Eligible employers may claim a 50% refundable payroll tax credit on wages paid (including health insurance benefits) of up to $10,000 that are paid or incurred from March 13, 2020, through December 31, 2020.
For employers who had an average number of full-time employees in 2019 of 100 or fewer, all employee wages are eligible, regardless of whether the employee is furloughed. For employers who had a larger average number of full-time employees in 2019, only the wages of employees who are furloughed or face reduced hours as a result of their employers’ closure or reduced gross receipts are eligible for the credit.
Be aware that additional rules and restrictions apply.
If you have any questions regarding accounting, domestic taxation, essential business accounting, international taxation, IRS representation, U.S. tax implications of Real Estate transactions or financial statements, please give us a call at 305-274-5811.
Source: Thomson Reuters