Tax Law and News IRS provides guidance for employers claiming the Employee Retention Credit for 2020 Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Intuit Accountants Team Modified Apr 6, 2021 2 min read The IRS recently issued guidance for employers claiming the employee retention credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as modified by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act), for calendar quarters in 2020. The guidance in Notice 2021-20 is similar to the information in the employee retention credit FAQs, but also includes clarifications and describes retroactive changes under the new law applicable to 2020, primarily relating to expanded eligibility for the credit. For 2020, the employee retention credit can be claimed by employers who paid qualified wages after March 12, 2020, and before Jan. 1, 2021, and who experienced a full or partial suspension of their operations or a significant decline in gross receipts. The credit is equal to 50 percent of qualified wages paid, including qualified health plan expenses, for up to $10,000 per employee in 2020. The maximum credit available for each employee is $5,000 in 2020. A significant change for 2020 made by the Relief Act permits eligible employers that received a Paycheck Protection Program (PPP) loan to claim the employee retention credit, although the same wages cannot be counted both for seeking forgiveness of the PPP loan and calculating the employee retention credit. Notice 2021-20 explains when and how employers that received a PPP loan can claim the employee retention credit for 2020. Notice 2021-20 also provides answers to questions such as the following: Who are eligible employers? What constitutes full or partial suspension of trade or business operations? What is a significant decline in gross receipts? How much is the maximum amount of an eligible employer’s employee retention credit? What are qualified wages? How does an eligible employer claim the employee retention credit? How does an eligible employer substantiate the claim for the credit? While the Relief Act also extended and modified the employee retention credit for the first two calendar quarters in 2021, Notice 2021-20 addresses only the rules applicable to 2020. The IRS plans to release additional guidance soon addressing the changes for 2021. Be sure to visit the Intuit® Tax Pro Center for the latest tax law and news updates. Previous Post State stimulus relief Next Post Advising your clients on repaying deferred payroll taxes Written by Intuit Accountants Team The Intuit® Accountants team provides ProConnect™ Tax, Lacerte® Tax, ProSeries® Tax, and add-on software and services to enable workflow for its customers. Visit us at https://proconnect.intuit.com, or follow us on Twitter @IntuitAccts. More from Intuit Accountants Team 2 responses to “IRS provides guidance for employers claiming the Employee Retention Credit for 2020” Can you give us more information about the forgiveness of unemployment benefits and when Lacerte will have an update to process this? Also, will there be an expedited process for already filed returns that now have to be amended for the unemployment forgiveness? Hi Mike – please contact Lacerte support at 800-933-9999. Thanks. Browse Related Articles Practice Management Intuit® Tax Council Profile: Shahab Maslehati Workflow tools Why we talk so much about QuickBooks® Online Advisory Services How tax pros work with controllers vs CFOs Advisory Services Helping clients with healthcare planning Practice Management Reshaping accounting: Millennials and Gen Zs Tax Law and News Tax relief for victims of Hurricane Helene Workflow tools 3 guides to moving your clients to QuickBooks® Online Practice Management Intuit introduces Intuit® Enterprise Suite Practice Management Partnering to power prosperity: Intuit and the accounti… Advisory Services 7 Intuit® Tax Advisor updates
Can you give us more information about the forgiveness of unemployment benefits and when Lacerte will have an update to process this? Also, will there be an expedited process for already filed returns that now have to be amended for the unemployment forgiveness?