On June 1st, The IRS provided an updated Form 941. They also provided additional guidance on The Employee Retention Credit (ERC) and other related stimulus act items. If you did not receive a PPP Loan, then you should probably avail yourself of this additional relief.
The ERC provides a 50% credit on up to $10,000 in qualified wages from a qualified employer. This is a credit rather than a forgivable loan. As such, it is not something that you must apply for. It is simply something that you take on the payroll tax returns.
This applies to wages paid from March 12, 2020 to December 31, 2020. We took this credit for many of you on your first quarter payroll tax return. This was something that we were instructed to do, but now The IRS has changed its advice.
The guidance that just came out specifically states the following, and I quote…
“76. How does an Eligible Employer report qualified wages paid in the first quarter of 2020?
An Eligible Employer that pays qualified wages in the first quarter of 2020 should report those wages on Form 941, Employer’s Quarterly Federal Tax Return, for the second quarter of 2020.”
Would you please tell me how to do that? Would you please tell me how to claim first quarter wages on a second quarter return?
So Mrs. Lincoln, how was the play?
We are obviously in a fluid environment that changes without notice. My point is that for those of you where I did claim the credit in the first quarter, we may receive a letter where a response is necessary. We’ll get through this ridiculousness. Just forward them at your convenience.
The ERC is a fantastic way to get some relief in these difficult times. In order to qualify, your business must be
– Fully or partially shut down during any calendar quarter in 2020 and
– You must experience a 50% or more decline in gross receipts, as compared to the same quarter in 2019
The updated Form 941 requires that additional information be provided for
– Qualified Sick Leave Wages
– Qualified Family Leave Wages
– The Non-Refundable and The Refundable Portion of Tax Credits
– The Deferred Amount of the Employer Share of Social Security Taxes
– Advances received from filing Form 7200
If you would like to claim this credit on the second quarter payroll tax returns, please contact us today.
Let me leave you with this one thought…
The looting and rioting of the past couple of days continues in the Chicagoland Area. Businesses that weren’t shut down have needed to board up and close. Other businesses that were on their last legs have been looted and burned, causing even more hardship to their entrepreneurs. I just got off the phone with a Brother who spent the last couple of nights in his business with a shotgun on his lap.
Much of this has occurred in areas that were already extremely economically depressed. As such, many of those areas will never be rebuilt, leaving those communities in even worse shape than they were when this began.
When does any of this end?
I have extreme difficulties believing that the stay at home order and the looting are unrelated items. No one is really talking about the psychological effects of being forced to stay home, shut down your business, and lose your job. This was a situation that was bound to explode, and that is exactly what has happened.
The question becomes…When does it end?
When can we actually get back to business? When can we stop worrying about knuckleheads looting and burning our businesses? When can we get back to some sense of normalcy?
If I had a crystal ball I could tell you.
What I can tell you is that sooner or later this will end. Sooner or later we will get back to some sense of normalcy. No matter what happens, we are here to help.
If you need further assistance with PPP Loan forgiveness, please go to the following link
Accounting Solutions Ltd. stands ready to complete its mission and purpose of protecting you, your family, and your business. If there is anything that you need, whether you are a current client or not, please contact us today. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
888-310-0300
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