VIEWpoint Issue 1 | 2020
VIEWpoint Issue 3 | 2019
Contractor’s Revenue Recognition Reminder Checklist
$1.5 Million Penalty for SAR Failures
7 Timeless Cash-Flow Management Tips
Michigan Taxpayers Reporting Unemployment Compensation Exclusion...
On April 2, 2020, the Internal Revenue Service (IRS) announced new guidance for employers claiming the Employee Retention Credit (ERC). Employers may access the ERC for the first and second quarters of 2021 before filing employment tax returns by reducing employment tax deposits.
Notice 2021-23 highlights the changes to the ERC for the first two quarters of 2021 and includes the following updates:
1. Increase in the Maximum Credit Amount from 50% to 70%
2. Expansion of ERC-Eligible Employers
3. Changes to Gross Receipts Test Threshold and Calculation
4. Updates to the Definition of Qualified Wages
5. New Restrictions Limiting Small Businesses to Request Advanced Payment of the ERC
Eligible employers that have no Paycheck Protection Program (PPP) loan or have received their loan forgiveness already should file Form 941-X for each quarter they wish to claim the credit for. If an employer has not received PPP loan forgiveness, a Form 941 should be filed for the fourth quarter of 2020 or a Form 941-X for each quarter claimed.
Guidance suggests to claim the credit for the first and second quarters of 2021, eligible employers should reduce their payroll deposits, including federal income tax withheld from employees, along with both the employee and employer portions of the Social Security and Medicare taxes, and file a Form 941 for each applicable quarter.
While President Biden’s American Rescue Plan Act (ARPA) makes the ERC available to qualifying employers for wages paid in the third and fourth quarters of 2021, there is more information to come from both the IRS and the Department of the Treasury. In the meantime, if you need assistance calculating or claiming the ERC for the first half of 2021, contact Doeren Mayhew’s tax advisors today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
A quick registration is required to view our resources.
You will only be asked to do this one time (unless you don't save your browser cookies).