Ashley just opened up a new eatery, "Forkhill Kitchen". Two months into opening her new business, COVID-19 struck, and a national stay at home order was mandated. Due to the nature of her business, she was still allowed to keep her eatery open, offering curbside pick-up and food delivery. As much as she wanted to run the show on her own, she knew she still had to continue employing a limited amount of staff. She begins to browse the internet and keeps seeing headlines regarding an "Employee Retention Credit" under the CARES Act. She is not sure if she understands the credit correctly. Based on quick research, she thinks she may be eligible for a refundable tax credit of 50% of up to $10,000 in wages paid by an employer whose business has been financially impacted by COVID-19.

Ashley calls her accountant as soon as possible, wondering if he believes that she will be able to survive this pandemic financially. Her biggest concern is that she will barely make enough sales revenue to afford all of her business expenses, including her payroll. From an accountant\'s perspective, who is newly introduced to the Employee Retention Credit under the CARES Act, what would you advise Ashley? Does she identify as an "eligible employer" under the Employee Retention Credit guidelines? Do you believe she should give up and shut down her business or do you gather this credit, and other deductions can help her stay afloat?

 

Answer rating: 100% (QA)

Under the CARES act Ashley is eligible for employee retention credit guidelines As per IRS if there ... View the full answer