Is the credit available for employee salaries at the $40,000 level?
The credit is based on average salary for the company not on an individual level. The amount of average annual wages is determined by first dividing (1) the total wages paid by the employer to employees during the employer’s tax year by (2) the number of the employer’s full-time equivalents for the year. The result is then rounded down to the nearest $1,000 (if not otherwise a multiple of $1,000). For this purpose, wages means wages as defined for FICA purposes (without regard to the wage base limitation). Certain employees are not counted as employees for purposes of determining the amount of average annual wages. For more information see IRS FAQs at: http://www.irs.gov/newsroom/article/0,,id=220839,00.html.
