News & Notes - Page 2 of 21 - Catholic Benefit Plans

For the ERC, What is the definition of “qualified wages”?

Qualified wages are wages (as defined in section 3121(a) of the Internal Revenue Code (the “Code”)) and compensation (as defined in section 3231(e) of the Code), both determined without regard to the contribution and benefit base (as determined under section 230 of the Social Security Act), paid by an Eligible Employer to some or all […]

For the ERC, How is the maximum amount of the Employee Retention Credit available to Eligible Employers determined?

For 2020 calendar year, the credit equals 50 percent of the qualified wages (including qualified health plan expenses). The maximum amount of qualified wages taken into account with respect to each employee for the whole year is $10,000, so that the maximum credit for qualified wages paid to any employee is $5,000. Example 1: Employer M […]

For the ERC, If an employer is subject to a governmental order to fully or partially suspend its business operations and the order is subsequently lifted, is the employer considered to have business o

Yes. But only for periods during the calendar quarters in which the trade or business operations were fully or partially suspended. If the order was effective for a portion of the calendar quarter, then the employer is an Eligible Employer for the entire calendar quarter but can only claim a credit for wages paid during […]

For the ERC, If the operations of a trade or business of one member of an aggregated group are suspended by a governmental order, are the operations of that trade or business of the other members of t

Yes. All members of an aggregated group are treated as a single employer for purposes of the Employee Retention Credit. Accordingly, if a trade or business is operated by multiple members of an aggregated group and if the operations of one member of the aggregated group are suspended by a governmental order, then all members […]

For the ERC, Are an employer’s operations considered to be partially suspended for purposes of the Employee Retention Credit if the employer is required to reduce its operating hours by a governmental

Yes. An employer that reduces its operating hours due to a governmental order is considered to have partially suspended its operations since the employer’s operations have been limited by a governmental order. Example: Employer K operates a food processing facility that normally operates 24 hours a day. A governmental order issued by the local health department […]

For the ERC, If a governmental order requires an employer to close its workplace for certain purposes, but the workplace may remain operational for limited purposes, is the employer considered to have

Yes. If an employer’s workplace is closed by a governmental order for certain purposes, but the employer’s workplace may remain open for other purposes or the employer is able to continue certain operations remotely, the employer’s operations would be considered to be partially suspended. However, if all of an employer’s business operations may continue, even if […]

For the ERC, If a governmental order causes the suppliers to an essential business to suspend their operations, is the essential business considered to have a suspension of operations?

An employer with an essential business may be considered to have a full or partial suspension of operations if the business’s suppliers are unable to make deliveries of critical goods or materials due to a governmental order that causes the supplier to suspend its operations. If the facts and circumstances indicate that the essential business’s […]

For the ERC, may an Eligible Employer that averaged 100 or fewer full-time employees in 2019 treat its health plan expenses as qualified wages?

Yes. An Eligible Employer that averaged 100 or fewer full-time employees in 2019 may treat its health plan expenses paid or incurred, after March 12, 2020, and before January 1, 2021, during any period in a calendar quarter in which the employer’s business operations are fully or partially suspended due to a governmental order or […]

For the ERC, Does the amount of qualified health plan expenses include both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the employee?

Yes. The amount of qualified health plan expenses taken into account in determining the amount of qualified wages generally includes both the portion of the cost paid by the Eligible Employer and the portion of the cost paid by the employee with pre-tax salary reduction contributions. However, the qualified health plan expenses should not include […]

For the ERTC, when an Eligible Employer sponsors a health savings account (HSA) and a high deductible health plan (HDHP), are contributions to the HSA included in the qualified health plan expenses?

No, and Yes. The amount of qualified health plan expenses does not include Eligible Employer contributions to HSAs (or Archer MSAs.) But, Eligible Employers who sponsor an HDHP should calculate the amount of qualified health plan expenses in the same manner as an insured group health plan, or a self-insured plan, as applicable. If you […]