Yes, banks with one hundred or fewer full-time employees on average in 2019 may qualify for the Employee Retention Credit (subject to the factors discussed below) regardless of whether their employees worked during the COVID-19 pandemic. Banks with more than one hundred full-time employees on average in 2019 may qualify for the Employee Retention Credit only with respect to employees who did not work a calendar quarter in 2020 due to COVID-19.

Under the CARES Act, employers who carried on a trade or business in 2020 must satisfy one of two  conditions to qualify for the Employee Retention Credit: (1) “the employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter,” or (2) “the employer’s gross receipts are below 50% of the comparable quarter in 2019.” In Illinois, it is unlikely that a bank would qualify under the first category, since the Illinois Governor’s stay-at-home Executive Order entered on March 20, 2020 (and extended on April 1 and again on April 30, 2020), provides that banks are “essential businesses” that are “encouraged to remain open.”

Regarding the second category, for qualifying banks with one hundred or fewer full-time employees on average in 2019, “the credit is based on wages paid to all employees, regardless if they worked or not.” For qualifying banks with more than one hundred employees on average in 2019, “the credit is allowed only for wages paid to employees who did not work during the calendar quarter.” Consequently, a bank with more than one hundred full-time employees on average in 2019 would not qualify for the Employee Retention Credit with respect to employees who worked a reduced schedule due to COVID-19 in 2020, but a bank with fewer than one hundred full-time employees could qualify for the Employee Retention Credit.

For resources related to our guidance, please see:

• IRS, Employee Retention Credit available for many businesses financially impacted by COVID-19 (March 31, 2020) (“Qualifying wages are based on the average number of a business’s employees in 2019.

Employers with less than 100 employees: If the employer had 100 or fewer employees on average in 2019, the credit is based on wages paid to all employees, regardless if they worked or not. If the employees worked full time and were paid for full time work, the employer still receives the credit.

Employers with more than 100 employees: If the employer had more than 100 employees on average in 2019, then the credit is allowed only for wages paid to employees who did not work during the calendar quarter.”)

• CARES Act, Section 2301(a) (“In the case of an eligible employer, there shall be allowed as a credit against applicable employment taxes for each calendar quarter an amount equal to 50 percent of the qualified wages with respect to each employee of such employer for such calendar quarter.”)

• CARES Act, Section 2301(c)(2)(A) (“The term ‘eligible employer’ means any employer—

(i) which was carrying on a trade or business during calendar year 2020, and

(ii) with respect to any calendar quarter, for which—

• (I) the operation of the trade or business described in clause (i) is fully or partially suspended during the calendar quarter due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to the coronavirus disease 2019 (COVID–19), or
• (II) such calendar quarter is within the period described in subparagraph (B).”)

• CARES Act, Section 2301(c)(2)(B) (“The period described in this subparagraph is the period—

(i) beginning with the first calendar quarter beginning after December 31, 2019, for which gross receipts (within the meaning of section 448(c) of the Internal Revenue Code of 1986) for the calendar quarter are less than 50 percent of gross receipts for the same calendar quarter in the prior year, and

(ii) ending with the calendar quarter following the first calendar quarter beginning after a calendar quarter described in clause (i) for which gross receipts of such employer are greater than 80 percent of gross receipts for the same calendar quarter in the prior year.”)

• IRS, Employee Retention Credit available for many businesses financially impacted by COVID-19 (March 31, 2020) (“The credit is available to all employers regardless of size, including tax-exempt organizations. There are only two exceptions: State and local governments and their instrumentalities and small businesses who take small business loans. Qualifying employers must fall into one of two categories:

• 1. The employer's business is fully or partially suspended by government order due to COVID-19 during the calendar quarter.
• 2. The employer's gross receipts are below 50% of the comparable quarter in 2019. Once the employer's gross receipts go above 80% of a comparable quarter in 2019, they no longer qualify after the end of that quarter.

These measures are calculated each calendar quarter.”)

• Illinois Executive Order 2020-10 (March 20, 2020) (“All businesses and operations in the State, except Essential Businesses and Operations as defined below, are required to cease all activities within the State except Minimum Basic Operations, as defined below. . . . All Essential Businesses and Operations are encouraged to remain open. . . . For the purposes of this Executive Order, Essential Businesses and Operations means . . . the following: . . . banks . . .”)

• Illinois Executive Order 2020-18 (April 1, 2020) (“Executive Order 2020-10 is continued and extended in its entirety for the duration of the Gubernatorial Disaster Proclamations, which currently extends through April 30, 2020.”)

• Illinois Executive Order 2020-32 (April 30, 2020) (“All businesses and operations in the State, except Essential Businesses and Operations as defined below, are required to cease all activities within the State except Minimum Basic Operations, as defined below. . . . All Essential Businesses and Operations may remain open consistent with the express provisions of this Order . . . For the purposes of this Executive Order, Essential Businesses and Operations means . . . the following: . . . banks . . .”)

• CARES Act, Section 2301(c)(3)(A) (“The term ‘qualified wages’ means—

(i) in the case of an eligible employer for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was greater than 100, wages paid by such eligible employer with respect to which an employee is not providing services due to circumstances described in subclause (I) or (II) of paragraph (2)(A)(ii), or

(ii) in the case of an eligible employer for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was not greater than 100—

• (I) with respect to an eligible employer described in subclause (I) of paragraph (2)(A)(ii), wages paid by such eligible employer with respect to an employee during any period described in such clause, or
• (II) with respect to an eligible employer described in subclause (II) of such paragraph, wages paid by such eligible employer with respect to an employee during such quarter.

Such term shall not include any wages taken into account under section 7001 or section 7003 of the Families First Coronavirus Response Act.”)

• IRS, Employee Retention Credit available for many businesses financially impacted by COVID-19 (March 31, 2020) (The amount of the credit is 50% of qualifying wages paid up to $10,000 in total. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Wages taken into account are not limited to cash payments, but also include a portion of the cost of employer provided health care.”)