The Senate has passed a $2 trillion stimulus deal, expanding on the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which includes individual and corporate relief to offset the consequences of the coronavirus pandemic. The bill, which has the support of the White House, now awaits attention and a potential “voice vote” in the House.

Importantly the bill includes a refundable employee retention credit, which applies to employers that either experienced full or partial closure due to a governmental order relating to coronavirus or had a 50%+ decline in gross receipts for any calendar quarter in 2020 as compared with the same quarter in 2019. The credit is equal to 50% of wages paid after 3/12/20 (up to a maximum qualifying total annual wage per employee of $10,000) to eligible employees who were not providing services. Enhanced employee eligibility provisions apply to small businesses with less than 100 full-time employees. The credit is taken against employment taxes, and expires if and when the gross receipts for a quarter in 2020 bounce back to 80%+ of gross receipts as compared with the same quarter in 2019.

If the Act passes, it is important to ensure that the period of wages considered for this employee retention credit are not also considered for any WOTC credits, and therefore we are looking forward to working with our clients to ensure that all potential credits are maximized during this trying time.

We will continue to keep you informed as the bill moves through Congress, and we encourage you to reach out to your First Advantage Tax Account Consultant, or your company’s tax advisor or legal counsel, to discuss the ongoing tax-related impacts of coronavirus.