įor purposes of the credit from its inception in March 2020 through June 30, 2021, the credit was first used to offset the following employer payroll taxes:įor purposes of the employee retention credit under the CARES Act, section 2301(c)(1) defines “applicable employment taxes” to mean the taxes imposed on employers by section 3111(a) of the Code (employer’s share of the Old Age, Survivors, and Disability Insurance (social security tax)), or so much of the taxes imposed on employers by section 3221(a) of the Code (Tier 1 tax under the Railroad Retirement Tax Act (RRTA)) that are attributable to the rate in effect under section 3111(a). Second, any remaining balance is treated as refunded to the taxpayer, though the IRS has very reasonably allowed this refund to first be offset against the payroll tax deposits remaining due when the credit is claimed. Change in Applicable Employment Taxes Offset First by Creditįor reasons having to do with the trust fund tax penalties and other accounting issues, the ERC has always been used in the following order:įirst, to reduce the employer’s share of certain payroll taxes imposed on the employer (but not those withheld from the employee) and then The first section of the guidance discusses the changes in the ERC that apply for the last six months of 2021. Changes Made Related to the Credit for the Last Six Months of 2021 (IRC §3134) There are two major sections to the Notice, the first providing guidance on the changes made to the ERC for the 3rd and 4th quarter of 2021 and the second providing guidance on additional issues applicable to all versions of the ERC. In the case of the issues for §§51(i)(1) and 267(c), the IRS arrived at an identical conclusion to that expressed in our April article-wages paid to those with a controlling interest in the employer will not be eligible for the credit unless the controlling interest holder has no living relatives (or just very remote ones). The IRS has published 34 pages of additional guidance on the Employee Retention Credit (ERC), including the first guidance on the changes made for the 3rd and 4th quarter credits and the official IRS word on the related party issues raised by the references to IRC §§51(i)(1) and 267(c) we wrote about in April of 2021.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |