Frequently asked question #55 “May an Eligible Employer that averaged more than 100 full-time employees during 2019 treat wages paid to exempt salaried employees for time for which they are not providing services as qualified wages for purposes of the Employee Retention Credit?” under the Determining Qualified Wages section of FAQs: Employee Retention Credit under the CARES Act, provided by the IRS.gov to help business owners understand the ERC program. Information is below for the question #55 May an Eligible Employer that averaged more than 100 full-time employees during 2019 treat wages paid to exempt salaried employees for time for which they are not providing services as qualified wages for purposes of the Employee Retention Credit?
ERC Credit Frequently Asked Question #55:
COVID-19-Related Employee Retention Credits:
Determining Qualified Wages FAQs
55. May an Eligible Employer that averaged more than 100 full-time employees during 2019 treat wages paid to exempt salaried employees for time for which they are not providing services as qualified wages for purposes of the Employee Retention Credit?
Yes. For an Eligible Employer that averaged more than 100 full-time employees during 2019, the wages paid after March 12, 2020, and before January 1, 2021, to exempt salaried employees for the time that they are not providing services would be considered qualified wages for purposes of the Employee Retention Credit.
An Eligible Employer may use any reasonable method to determine the number of hours that a salaried employee is not providing services, but for which the employee receives wages either at the employee’s normal wage rate or at a reduced wage rate.
Reasonable methods include the method (or methods) the employer uses to measure exempt employees’ entitlement to leave on an intermittent or reduced leave schedule under the Family and Medical Leave Act, or the method the employer uses to measure exempt employees’ entitlement to and usage of paid leave under the employer’s usual practices.
It is not reasonable for the employer to treat an employee’s hours as having been reduced based on an assessment of the employee’s productivity levels during the hours the employee is working.
Example 1: Employer V, a large fitness club business that employed an average of more than 100 full-time employees in 2019, closed all of its locations in City B by order of City B’s mayor. Employer V continues to pay its exempt managerial employees their regular salaries.
While the clubs are closed and there is not sufficient administrative work to occupy the managerial employees full-time, they continue to perform some accounting and similar administrative functions.
Employer V has determined, based on the time records maintained by employees, that they are providing services for 10 percent of their typical work hours. In this case, 90 percent of wages paid to these employees during the period the clubs were closed are qualified wages.
Example 2: Employer W, a large consulting firm that employed an average of more than 100 full-time employees in 2019, closed its offices due to various governmental orders and required all employees to telework.
Although Employer W believes that some of its employees may not be as productive while working remotely, employees are working their normal business hours. Because employees’ work hours have not changed, no portion of the wages paid to the employees by Employer W are qualified wages.
For more Internal Revenue Service (IRS) Department of the Treasury Employee Retention Credit (ERC) Determining Qualified Wages FAQs, visit the official IRS.gov tax website.
Conclusion and Summary on ERC Credit FAQ #55. May an Eligible Employer that averaged more than 100 full-time employees during 2019 treat wages paid to exempt salaried employees for time for which they are not providing services as qualified wages for purposes of the Employee Retention Credit?
The “May an Eligible Employer that averaged more than 100 full-time employees during 2019 treat wages paid to exempt salaried employees for time for which they are not providing services as qualified wages for purposes of the Employee Retention Credit?” is Frequently Asked Question #55 of many commonly asked questions small business owners are wondering about how to file the Employee Retention Tax Credit (ERTC). The IRS ERC Tax Credit program is a confusing and complex process to determine the correct ERC calculations your business qualifies for. Answers to “May an Eligible Employer that averaged more than 100 full-time employees during 2019 treat wages paid to exempt salaried employees for time for which they are not providing services as qualified wages for purposes of the Employee Retention Credit?” and filling out form 941-X may change slightly from frequently updated rules and regulations from the IRS. Leave a comment below if you have further questions on ERC Credit FAQ #55.
Help Completing / Filing / Claiming the Employee Retention Credit (ERC)
Receive Up to a $26,000 ERC Credit from the IRS Per Employee
Disaster Loan Advisors can assist your business with the complex and confusing Employee Retention Credit (ERC), Form 941-X, and the Employee Retention Tax Credit (ERTC) program.
Depending on eligibility, business owners and companies can receive up to $26,000 per employee based on the number of W2 employees you had on the payroll in 2020 and 2021.
The ERC / ERTC Tax Credit Program is a valuable IRS tax credit you can claim. This is money you have already paid to the IRS in payroll taxes for your W2 employees.
We DO NOT charge a percentage (%) of your ERC Refund like some companies are charging. Some ERC firms out there are charging upwards of 15% to 35% of your ERC refund!
Our professional ERC fee and pricing structure is very reasonable in comparison.
If you are looking for an ERC Company that believes in providing professional ERC Services and value, in exchange for a fair, reasonable, and ethical fee for the amount of work required, Disaster Loan Advisors is a good fit for you.
Schedule Your Free Employee Retention Credit Consultation to see what amount of employee retention tax credit your company qualifies for.
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As a leading dedicated member of the Tax and Accounting Team at Disaster Loan Advisors™, Mark focuses on unlocking the ERC Tax Credit's potential for eligible firms that qualify, providing strategic advice, and detailed guidance to ensure substantial financial recovery and growth. His methodical approach to client engagement includes comprehensive deep-dive analysis, customized consultation and guidance, and a commitment to achieving tangible results for each business served.
Disaster Loan Advisors™ (DLA) offers a comprehensive suite of services designed to navigate the complexities of the Employee Retention Tax Credit (ERC) program, ensuring that qualified businesses leverage the maximum possible benefit with minimum hassle. Unlike some firms that charge exorbitant contingency or percentage-based fees (often between 10% to 30% of your ERC refund), DLA operates on a fair and reasonable, transparent flat-fee structure that aligns with the IRS's guidelines.
If you are looking for an ERC Company that believes in providing professional ERC Services and value for small business owners, in exchange for a fair, reasonable, and ethical fee for the amount of work required, Disaster Loan Advisors™ is a good fit for you. STAY SAFE. STAY COMPLIANT. KEEP MORE OF YOUR REFUND.™