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Employee Retention Credits (ERC) for CPAs

  • Written by Steel Rose

The Consolidated Appropriations Act, 2021, P.L. 116-260, extends the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, ERC through June 30, 2021. It also expands the ERC and makes technical corrections. The expansions of the credit include:

  • An increase in the credit rate from 50% to 70% of qualified wages;
  • An increase in the limit on per employee creditable wages from $10,000 for the year to $10,000 for each quarter;
  • A reduction in the required year-over-year gross receipts decline from 50% to 20%;
  • A safe harbor allowing employers to use prior-quarter gross receipts to determine eligibility;
  • A provision to allow certain governmental employers to claim the credit;
  • An increase from 100 to 500 in the number of employees counted when determining the relevant qualified wage base; and
  • Rules allowing new employers who were not in existence for all or part of 2019 to be able to claim the credit.

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