Hello fellow tax preparers !!
If a company has 5 employees is the requirement to obtain the credit contingent on payment them while they are not providing services?
As previously noted, section III.G. of Notice 2021-20 provides rules for
determining qualified wages. The specific circumstances in which wage payments by
an eligible employer will be considered qualified wages depend, in part, on the average
number of full-time employees an eligible employer employed during 2019. For
purposes of the employee retention credit for 2020, for an eligible employer with an
average number of full-time employees3 greater than 100 during 2019 (2020 large
eligible employers), qualified wages are the wages paid to an employee for time that the
employee is not providing services due to either (1) a full or partial suspension of an
employer's business operations due to a governmental order, or (2) the business
experiencing a significant decline in gross receipts. For purposes of the employee
retention credit for 2020, for an eligible employer with an average number of full-time
employees not greater than 100 during 2019 (2020 small eligible employers), qualified
wages are the wages paid with respect to any employee during any period in the
calendar quarter in which the business operations are fully or partially suspended due to
a governmental order or during any calendar quarter in which the business is
experiencing a significant decline in gross receipts.
Thanks,
At