In further guidance issued Monday, the Internal Revenue Service made some much needed changes to rules on the Employee Retention Credit (ERC). They clarified a few things and eliminated potential penalties.
Recovery Startup Businesses Can File For The 4th Quarter 2021 ERC
A Recovery Startup Business is defined as one that began operations after February 15th, of 2020, has annual receipts below $1M, and that has one or more employees that are not 50% or greater owners. These businesses are allowed to collect the ERC for the 4th quarter of this year.
Yes. That’s right. Older established businesses like mine cannot claim the credit, but brand new ones can.
Employers Get Penalty Relief On Early End To ERC
If you are an employer who, in anticipation of receiving the ERC in the 4th quarter of 2021 did not make your payroll tax deposits, the IRS is waiving penalties on those late deposits as long as the following occurs…
1 – All payroll tax deposits are made in full before December 31, 2021
2 – The employer reports the tax liability resulting from the early termination of the ERC on the applicable Form 941.
Further, the IRS will not waive any failure-to-deposit penalties for any reductions on payrolls after December 20, 2021.
The Ability To Amend In Order To Receive The Credit Is Affirmed
Employers who have not yet claimed the ERC have the ability to amend their 941’s up to three years after the initial due date of the returns.
If you haven’t yet claimed the credit, what’s holding you back? Sign up for our Employee Retention Credit Consulting and Preparation Program today.
Let me leave you with this.
The Tribune ran a piece a couple of days ago about the Omicron Variant that included some interesting numbers. On the issue of transmission, scientists are looking at what’s happening in South Africa, where the variant was first detected.
New cases per day were averaging less than 200 in mid-November. That number has increased to more than 16,000 per day as of last weekend. 90% of the new cases reported have been traced back to Omicron.
It’s still too early to tell because not enough data has been collected or analyzed, but one thing is certain. We aren’t out of the woods on this thing yet by a long shot.
This coupled with the fact that public health officials in Chicago are now floating the idea of requiring proof of vaccination in order to enter public buildings, tells me that they’re probably going to begin some sort of step-back on the opening procedures in the near future.
What will happen, and where it will happen, is difficult to predict. Currently, Cook County is showing a fully vaccinated rate of 64.85%. Most downstate counties are only in the 30’s led by Alexander County at only 19.39%. Available ICU Beds are now down to 12.2% in Chicago.
I share this information with you so that you can be ready. Only whatever God you pray to could possibly tell us what the future will hold.
But if the administration is floating ideas, it means that something will probably happen in the near future.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, PPP Loan Forgiveness, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
www.AccountingSolutionsLtd.com
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