Guidance on the Employee Retention Credit and Eligibility Rules for PPP Borrowers
For 2020, the employee retention credit can be claimed by employers who paid qualified wages after March 12, 2020 and before January 1, 2021, and who experienced a full or partial suspension of their operations or a significant decline in gross receipts. The credit is equal to 50 percent of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020. The maximum credit available for each employee is $5,000 in 2020.
A significant change for 2020 made by the Taxpayer Certainty and Disaster Tax Relief Act permits eligible employers that received a PPP loan to claim the employee retention credit, although the same wages cannot be counted both for seeking forgiveness of the PPP loan and calculating the employee retention credit. Notice 2021-20
explains when and how employers that received a PPP loan can claim the employee retention credit for 2020. Get details here