IRS Issues New Guidance on Tax Credit for Employers – Your Business May Qualify for More Than You Think
For the first half of 2021 eligible employers may claim a credit of up to $7,000 per employee per quarter against employment taxes paid on qualified wages. Based on the recent changes to the CARES Act, there may also be new opportunities to claim this credit retroactively for wages paid after March 12, 2020 through December 31, 2020 for up to $5,000 per employee.
Just yesterday the IRS issued some initial guidance on eligibility criteria for employers seeking to qualify for the credit. Determining if your business qualifies for the Employee Retention Credit (ERC) requires a careful review of facts and circumstances relating to COVID-19 disruptions to your operations. Also, Paycheck Protection Plan (PPP) loan recipients can now benefit from the ERC. This opens an opportunity for employers who passed on the credit to take advantage of the PPP forgiveness to retroactively apply for the credit on 2020 qualifying wages.
The HSC Team is Ready to Help!
Under the enhanced and expanded Employee Retention Credit, your business may now have an opportunity to take advantage of this tax benefit for 2021 and go back to claim credits for 2020. We have a team dedicated to helping you navigate this credit and coordinate with PPP to provide you with the optimal relief. Please contact your HSC advisor to discuss how the ERC may benefit your situation.