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Human Resources

BREAKING NEWS: IRS issues guidance regarding the retroactive termination of the Employee Retention Credit

Hey Compliance Warriors!

 

The Internal Revenue Service today issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. The Infrastructure Investment and Jobs Act, which was enacted on Nov. 15, 2021, amended the law so that the Employee Retention Credit applies only to wages paid before October 1, 2021, unless the employer is a recovery startup business.

 

Notice 2021-65 applies to employers that paid wages after September 30, 2021, and received an advance payment of the Employee Retention Credit for those wages or reduced employment tax deposits in anticipation of the credit for the fourth quarter of 2021, but are now ineligible for the credit due to the change in the law. The notice also provides guidance regarding how the rules apply to recovery startup businesses during the fourth quarter of 2021.

 

Employers who Received Advance Payments

Generally, employers that are not recovery startup businesses and received advance payments for fourth quarter wages of 2021 will avoid failure to pay penalties if they repay those amounts by the due date of their applicable employment tax returns.

 

Employers who Reduced Employment Tax Deposits

Employers that reduced deposits on or before Dec. 20, 2021, for wages paid during the fourth calendar quarter of 2021 in anticipation of the Employee Retention Credit and that are not recovery startup businesses will not be subject to a failure to deposit penalty with respect to the retained deposits if—

The employer reduced deposits in anticipation of the Employee Retention Credit, consistent with the rules in Notice 2021-24,
The employer deposits the amounts initially retained in anticipation of the Employee Retention Credit on or before the relevant due date for wages paid on December 31, 2021 (regardless of whether the employer actually pays wages on that date). Deposit due dates will vary based on the deposit schedule of the employer, and
The employer reports the tax liability resulting from the termination of the employer’s Employee Retention Credit on the applicable employment tax return or schedule that includes the period from October 1, 2021, through December 31, 2021. Employers should refer to the instructions to the applicable employment tax return or schedule for additional information on how to report the tax liability.

 

Due to the termination of the Employee Retention Credit for wages paid in the fourth quarter of 2021 for employers that are not recovery startup businesses, failure to deposit penalties are not waived for these employers if they reduce deposits after Dec. 20, 2021.

 

If an employer does not qualify for relief under this Notice, it may reply to a notice about a penalty with an explanation and the IRS will consider reasonable cause relief.

 

More information for businesses seeking coronavirus-related tax relief can be found at IRS.gov.

 

Be Audit-Secure

 

Lisa Smith, SPHR, SHRM – SCP

Certified EEO Investigator (EEOC)

Lead Support and Content Chief – HelpDeskforHR.com

“You cannot be audit-proof, but you can Be Audit-Secure.”

 

Are you struggling with potential EEOC claims or violations?

 

How about when Big Boss is pushing back on what you KNOW needs to be done, but they just cannot seem to wrap their brains around the suggestions you are making?

 

Sometimes you need an internal investigation conducted by an UNBIASED 3rd PARTY before a claim, charge, or lawsuit is filed against the company and/or the responsible parties within.

 

I am an EEOC Certified Investigator

 

As an EEOC Certified Investigator, I have seen a lot of tough issues that employers really should have researched before making the decision to “do it the way we’ve always done it” OR “not let some employee handbook boss me around”.

 

How about the time when the accused is your friend or you have some sort of relationship with the person that could cause others to view you as biased during an investigation. Recusing yourself may be the indicated course of action in some cases.

 

Remember, sometimes even decisions resulting from only the best intentions still pave the road to… well… court! (gotcha!)

 

I am ready, willing, and able to provide these services at the same rate as my regular telephone or Zoom consultations.

 

https://secure-cart.anderecorp.com/one-on-one-consulting/

 

And, don’t forget – I am a credentialed EEO INVESTIGATOR.

 

So, when you come across issues related to discrimination or harassment and need an unbiased 3rd-party to conduct the investigation please also think of me.

 

I have been fully trained by EEOC Administrative Judges and other Investigators.

 

There is no need to dig the hole deeper by trying to do these things on your own when conflicting interests may be in play.

 

So, next time you want to pass the investigation on to a professional investigator who has no skin in the game, think of me!

 

 

Lisa Smith, SPHR, SHRM – SCP

Certified EEO Investigator (EEOC)

Lead Support and Content Chief – HelpDeskforHR.com

“You cannot be audit-proof, but you can Be Audit-Secure.”

Email support@helpdeskforHR.com to schedule a consultation.

The post BREAKING NEWS: IRS issues guidance regarding the retroactive termination of the Employee Retention Credit appeared first on Your HelpDesk for HR .

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