Treasury and the IRS have issued further guidance on the employee retention credit, including guidance for employers who pay qualified wages after June 30, 2021, and before Jan. 1, 2022.
Notice 2021-49 addresses changes made by the American Rescue Plan Act (ARPA) to the employee retention credit that are applicable to the third and fourth quarters of 2021.
Those changes include expanding the definition of eligible employers to include recovery startup businesses and modifying the definition of qualified wages for severely financially distressed employers.
The notice also provides guidance on related miscellaneous issues like the definition of a full-time employee, the treatment of tips as qualified wages and the timing of qualified wages deduction disallowance. Learn more.