The IRS has issued guidance for employers claiming the employee retention credit (ERC) under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act).
Notice 2021-23 explains the changes to the ERC for the first two calendar quarters of 2021, including the increase in maximum credit amount, the expansion of eligible employer categories and modifications to the gross receipts test.
As a result of the changes made by the Relief Act, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after Dec. 31, 2020, through June 30, 2021. Read more.