The IRS recently issued Notice 2021-49, which provides updated and additional guidance related to the Employee Retention Tax Credit (ERTC), including guidance on employer eligibility.
The new guidance addresses changes made by the American Rescue Plan Act (ARPA) that are applicable to the third and fourth quarters of 2021. While previously only available to employers during the first two quarters of 2021, the ERTC is now available to eligible employers that pay qualified wages after June 30, 2021 and before January 1, 2022.
The guidance also addresses several qualifiers for employer eligibility, including expanding the definition of eligible employer to include “recovery startup businesses”, and modifying the definition of qualified wages for “severely financially distressed employers”.
Additionally, the IRS clarified that Paycheck Protection Program (PPP) loan forgiveness, Shuttered Venue Operator Grants (SVOG) and Restaurant Revitalization Grants are not considered gross receipts for the ERTC gross wage calculations.
For the latest information on the ERTC and other employer tax credits, visit the IRS website: https://www.irs.gov/coronavirus/employer-tax-credits.
If you have questions about the ERTC, leave a comment below, or feel free to reach out to me directly, I’m happy to help.