Government Connection

IRS Provides Guidance on the Employee Retention Credit under the CARES Act for the First and Second Calendar Quarters of 2021

On Friday, April 2, 2021, the Internal Revenue Service issued guidance for employers claiming the Employee Retention Credit (ERTC) 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). ERTC provides businesses that have experienced a significant decline in revenue (as defined in the rules) or that were fully or partially closed due to a government order with a refundable tax credit based on qualifying wages paid to eligible employees.  Originally, a business could not obtain both a PPP loan and the ERTC, but that rule was eliminated and now businesses can take advantage of both programs provided that wages paid with PPP funds must be excluded for the purpose of calculating the ERTC.  Businesses that may qualify for the ERTC are strongly encouraged to work with their advisors to ensure that they are maximizing their potential benefit under this program.

 

Read the full guidance HERE.

April 07, 2021

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