Explore These COVID-19-Related Tax Credits
It's no secret that 2020 has a remarkably tough year on businesses across the United States. Concerns regarding COVID-19 have caused many businesses to close down for a period of time, while others have shutdown completely. Luckily, some resources being available to business owners help elevate some of the damage caused by the COVID-19 fallout.
Tax advisor group Doeren Mayhew supplied Houston Business Journal with a list of three COVID-19-related tax credits that businesses with less than 500 employees should consider exploring by year's end. The following are a summary of those three credits:
1. A refundable paid sick leave credit
The Emergency Paid Sick Leave Act entitles American workers to take up to 80 hours of paid sick leave if they cannot work due to COVID-19. Employers can earn up to $511 per day for an employee who was unable to work due to COVID-19. However, that payout cannot exceed $5,110.
Employers can earn a lesser amount if an employee took sick leave to take care for a family member or child.
2. Employers are entitled to a full tax credit of up to $200 per day for an employee who had to miss work because their child or children didn't have care due to the closure of school or childcare services. This payout, which is part of the Emergency Family and Medical Leave Expansion Act, cannot exceed $10,000.
3. If, due to COVID-19, a business had to either fully or partially suspend operation or experienced a 50 percent decline in gross receipts during a calendar quarter, that business is eligible to apply for a tax credit valued at 50 percent of the wages paid to their employees. It's important to note that the wages must have been impacted between March 12, 2020 and Jan. 1, 2021 to qualify for the credit.
Employers can also defer the deposit and payment of their portion of the Social Security Taxes that were due between March 27, 2020 and Dec. 31, 2020.
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