IRS issues latest guidance on ERC


The Internal Revenue Service issued guidance on how businesses should handle the retroactive termination of the Employee Retention Credit.

The credit was originally meant to last until the end of 2021, but in the Infrastructure Investment and Jobs Act enacted in the middle of last month, Congress changed the law so that it only applies to wages paid before Oct. 1, 2021, except for employers that are recovery startup businesses.

In Notice 2021-65, the IRS warns business that paid wages after Sept. 30, 2021, and received an advance payment of the ERC on those wages that they need to repay those amounts by the due dates of the applicable employment tax returns.

Businesses that reduced their employment tax deposits in anticipation of being eligible for the credit must deposit the amount of that reduction on or before the relevant due date for wages paid on Dec. 31, 2021 (even if they don’t actually pay wages on that date), and report the appropriate tax liability.

The early termination of the credit does not apply to recovery startup businesses; the notice also offers guidance for them.

Products You May Like

Articles You May Like

Tesla Supercharges EV Stocks & ETFs
Top Stock Picks for Week of January 30, 2023
Bottles, Diapers, and 7 Tax Benefits: Life with a Newborn
Gautam Adani calls off $2.5 billion equity sale as regulatory concerns grow
Robots could surpass workers at Amazon by 2030, Cathie Wood says

Leave a Reply

Your email address will not be published. Required fields are marked *