The Employee Retention Credit is a U.S. federal tax credit for employers. Overview The Employee Retention Credit is a refundable tax credit against an employer's payroll taxes. It was established during the Donald Trump administration in 2020 through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in order to help employers during the pandemic. Eligibility There are two ways for an employer to be eligible for the Employee Retention Credit for a particular calendar quarter. The employer experienced a significant decline in gross receipts, or The employer either fully or partially suspended its operations because of governmental orders related to COVID-19 that limited commerce, travel, or group meetings. An eligible employer must be either a for-profit entity or an organizations that is tax-exempt under section 501(c) of the Internal Revenue Code. Significant Decline in Gross Receipts For 2020, a significant decline in gross receipts begins during a calendar quarter in which gross receipts decreased by at least 50percent compared to the corresponding quarter in 2019. Gross receipts include all income for the employer, including donations and grants. When an employer meets this test for a calendar quarter, the effective date is the first day of that particular calendar quarter. When an employer's gross receipts for a calendar quarter decreased no more than 20percent compared to its gross receipts for the same corresponding quarter in 2019, the employer's eligibility ends on the day following that calendar quarter. For 2021, a "significant decline in gross receipts" begins during a calendar quarter in which gross receipts decreased by at least 20percent compared to its gross receipts for the same corresponding quarter in 2019. Alternatively, an employer can compare its gross receipts to the previous calendar quarter. Fully or Partially Suspended Operations The employer is eligible if there was an order from the government to limit commerce, travel, or group meetings that resulted in the employer's partial or full suspension of operations. An order from the government includes an official rule from any federal, state, or local government that has jurisdiction over the employer. The governmental order must have caused the employer to either fully or partially suspend its operations. Only governmental orders and manditory requirements qualify. Recommendations, suggestions, and best practices issued by governmental entities do not qualify. In order to qualify, the order from the government must have affected an activity of the employer that constituted at least 10percent of