The IRS on April 2, 2021, issued additional guidance for employers claiming the employee retention credit (ERC) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as modified in December 2020 by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act). The ERC is designed to help eligible businesses retain employees by offering a credit against employment taxes when qualified wages and healthcare expenses are paid during the COVID-19 pandemic.
Notice 2021-23 provides additional guidance for taxpayers to use when preparing credit claims and explains the changes to the employee retention credit for the first two calendar quarters of 2021, including:
Increased Credit Amount
Broadened Eligibility Requirements
Determination of Qualified Wages
ERCs have become a regular discussion with ATA clients as they can be a relief to businesses who have been impacted by COVID-19. Please contact your ATA representative with further questions and guidance on this opportunity.