WASHINGTON — The Internal Revenue Service issued guidance for employers claiming the Employee Retention Credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act).
Notice 2021-23 PDF explains the changes to the Employee Retention Credit for the first two calendar quarters of 2021, including:
the increase in the maximum credit amount,
the expansion of the category of employers that may be eligible to claim the credit,
modifications to the gross receipts test,
revisions to the definition of qualified wages, and
new restrictions on the ability of eligible employers to request an advance payment of the credit.
As a result of the changes made by the Relief Act, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after December 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum employee retention credit available is $7,000 per employee per calendar quarter, for a total of $14,000 for the first two calendar quarters of 2021.
To learn more about the employee retention credit please visit IRS.GOV
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