COVID-19 Tax Relief for Your Business

The CARES Act provides a refundable tax credit against OASDI* payroll tax liability equal to 50% of the first $10,000 paid per employee so long as business operations have been fully or partially suspended due to government orders OR your business experiences a year-over-year reduction in gross receipts of at least 50% calculated by comparing calendar quarters. Eligibility for the credit continues until gross receipts exceed 80% year-over-year. For employers with more than 100 full-time employees (measured by 2019 count), only employees who are currently not providing services for the employer due to COVID-19 causes are eligible for the credit. Employers of 100 or fewer employees to not need to furlough employees to take the credit. The employee retention credit is effective for wages paid after March 12, 2020, and before January 1, 2021.

The CARES Act also postpones the due date for depositing an employer’s OASDI payroll taxes and 50% of self-employment OASDI taxes attributable to wages paid after March 27, 2020 and before January 1, 2021. The deferred amounts would be payable over the next two years – half due December 31, 2021, and half due December 31, 2022. The deferral is not available to any taxpayer who has debt forgiven under the small business interruption loan program of the CARES Act.

Download The Small Business Owner's Guide to the CARES Act.

* Old age, survivors, and disability insurance