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Employee Retention Credit Guidance Published

employee retention credit

1.5 minute read

The IRS published Notice 2021-23 to provide guidance for those employers who are claiming the employee retention credit (ERC) for the first two quarters of 2021.

The notice provides information about the changes effective for the first two quarters of 2021, including:

  • Maximum credit amount has been increased to 70% of qualified wages paid between January 1 and June 30, 2021
  • Expansion of the category of employers that may be eligible to claim the credit
  • Gross receipts test modifications
  • Qualified wages are limited to $10,000 per employee per calendar quarter in 2021
  • The maximum ERC per employee is $7,000 per quarter for a total of $14,000 for Q1 and Q2

Employers can access the ERC for Q1 and Q2 of 2021 prior to filing their employment tax returns by reducing employment tax deposits. Employers with 500 or fewer full-time employees can receive advance payment of the credit (subject to certain limits) after reducing deposits.

The ERC will also be available for the third and fourth quarters of 2021 and additional guidance will be forthcoming. Stayed tuned to our blog for more details.

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This blog is intended to be a compilation of information and resources pulled from federal, state, and local agencies. This is not intended to be legal advice. For up to the minute information and guidance on COVID-19, please follow the guidelines of the Centers for Disease Control and Prevention (CDC) and your local health organizations.

National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Scott Fritz

Scott Fritz

Scott Fritz always has a willingness to help others, which has made him an ideal candidate for working in the public sector benefits arena throughout his career. He’s a team player and enjoys strategizing, problem solving, and finding effective cost-saving solutions for his clients. As an Employee Benefit Consultant with National Insurance Services, Scott is responsible for the overall assessment and management of an employer’s benefit plans. He is a licensed insurance agent and works with schools, cities, counties, and community mental health organizations in Michigan and North Carolina.