The IRS has issued guidance for employers claiming the employee retention credit under the Coronavirus Aid, Relief and Economic Security Act, as modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, for calendar quarters in 2020.
The new guidance in Notice 2021-20 is like the information in the employee retention credit FAQs but includes clarifications and describes retroactive changes under the new law applicable to 2020, primarily relating to expanded eligibility for the credit.
For 2020, employers can claim the employee retention credit if they paid qualified wages after March 12, 2020, and before January 1, 2021, and who experienced a full or partial suspension of their operations or a significant decline in gross receipts due to the pandemic.
Notice 2021-20 also explains when and how employers that received a Paycheck Protection Program loan can claim the employee retention credit for 2020.