Certified Public Accountants

Updates to the Employee Retention Credit

Updates to the Employee Retention Credit

Posted on | General

In early August of this year, the IRS released additional guidance on the Employee Retention Credit. For 2021, the credit was expanded to allow businesses to receive a credit of up to $7,000 per employee per quarter if their operations were fully or partially shut down by government order or if they had a significant decline in gross receipts.

One of the biggest surprises and disappointments to come out of the guidance was the IRS conclusion that wages paid to majority owners and spouses do not qualify for the credit in most cases. How IRS arrived at this conclusion is a rather complex and confusing path that uses family attribution rules that view an entity as controlled by an owner’s family. Many tax professionals…

Read the full article in our October, 2021 newsletter here.