This credit didn’t get as much attention as the Paycheck Protection Program when both were passed as part of COVID-19 relief, and it may be curtailed early as a mechanism to fund infrastructure bills being proposed. This credit allows employers to receive a refundable credit of up to $7,000 per quarter for 2021, or up to a total of $28,000 per employee. To be eligible, a business must either be fully or partially closed due to government orders or have experienced a decline of 80% or more in gross receipts compared to the same calendar quarter of 2019. Startup companies may also be eligible. Employers can claim a refundable credit of 70% of wages, up to $10,000 in wages, or $7,000 per employee per quarter. The credit is claimed on the quarterly tax form, Form 941. As the credit now stands, it is available through the end of 2021, but there are discussions in Congress of cutting it off at the end of September. For more information, see the IRS FAQs for this credit.
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