Details of Public Law 116-260, section 207 , Extension and Modification of Employee Retention and Rehiring Tax Credit

This provision modifies and extends the employee retention credit (ERC), which is used to reduce Social Security Tax and Railroad Retirement Tax, by increasing the credit from 50 percent to 70 percent of qualified wages that are paid beginning on 3/13/2020 and ending on 6/30/2021. In addition, qualified wages are changed to $10,000 per employee, per quarter in calculating the credit, and employers qualify for the credit if their gross receipts for a calendar quarter are less than 80 percent of the gross receipts of such employer for the same calendar quarter in calendar year 2019.

Also, for employers with greater than 500 full-time employees, qualified wages are wages paid to employees when they are not providing services due to either of the COVID-19-related circumstances. For eligible employers with 500 or fewer full-time employees, all employee wages qualify for the credit if the employer has experienced one of the COVID-19 related circumstances.

The provision also includes various other technical changes to the ERC.