Employee Retention Credit for Employers Subject to Closure Due to COVID-19 Crisis

[BCVolkert]

Hi Paul,

I hope you and your team are doing well in the face of COVID-19. So, far we are doing well in Houston; but, our curve is just starting to accelerate.

I just did our 1Q20 941 and checked the IRS instructions (just for grins). https://www.irs.gov/pub/irs-pdf/i941.pdf includes an announcement that the credit for wages paid between 12 March 2020 and 1 January 2021 will begin to be applied on the 2Q20 941. It seems to indicate that the applicable wages paid in March 2020 will be credited in some manner during 2Q2020.

I'm hoping you'll be able to incorporate this into the update for PayWindow in time to do that very wierd 2Q20 941 and the rest of them.

It'll be interesting to see how they manage to pay 50% of the wages for so many people for 3/4 of a year! Seems like "Money for nothing, writing checks for free" is a bit prophetic.

Best of luck. Wash your hands. Cover your face. Stay inside. What a year!

Bruce

[Paul Mayer]

We are not even sure how they want this implemented as there are no detailed instructions we could find:

The Coronavirus Aid, Relief, and Economic Security (CARES) Act supports certain employers that operate a business during 2020 and retain employees, despite experiencing economic hardship related to the COVID-19 crisis, with an employee retention credit. The refundable tax credit is equal to 50% of qualified wages paid to employees after March 12, 2020, and before January 1, 2021. If you paid any qualified wages between March 13, 2020, and March 31, 2020, inclusive, you will include 50% of those wages together with 50% of any qualified wages paid during the second quarter of 2020 on your second quarter Form 941, 941-SS, or 941-PR to claim the employee retention credit. Do not include the credit on your first quarter Form 941, 941-SS, or 941-PR.

The only thing we are sure of is that you can not pay the employer share of the FICA and then will have to pay it next year in two payments.