The IRS is urging employers to take advantage of the newly-extended employee retention credit or ERC – which makes it easier for businesses that have kept employees on the payroll despite challenges presented by COVID-19.
Consolidated Appropriations Act
In welcome news for nonproft organizations that were not eligible for the ERC in 2020 due to receiving a PPP loan, the Consolidated Appropriations Act, 2021 retroactively eliminates this limitation and extends and enhances the ERC through the first two quarters of 2021.
The CAA or Consolidated Appropriations Act, 2021 includes two tax relief acts that directly impact individual taxpayers. First is the COVID-related Tax Relief Act of 2020 (CRTRA), which provides an additional recovery rebate for individuals. The second is the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTRA).
The Consolidated Appropriates Act, 2021 contains significant enhancements and improvements to the Employee Retention Credit (ERC).
The Consolidated Appropriations Act, 2021 addresses tax provisions related to the PPP which could have consequences for state and local tax.