IRS Releases Guidance on Employee Retention Credit
On August 4, 2021, the Internal Revenue Service (IRS) published Notice 2021-49 with respect to the 2021 Employee Retention Credit (ERC). Previously, The American Rescue Plan Act (ARPA, P.L. 117-2) extended the ERC through December 2021 and revised certain provisions and ERC eligibility. With this recently issued notice, the IRS provides further details related to some important matters businesses needed clarification on.
Specific topics addressed include recovery startup businesses; coordination with PPP loans; severely financially distressed employers; and wages paid to majority owners and spouses, in addition to clarifying other areas.