Employee Retention Credit (ERC) – The expanded ERC provisions under the 2021 Consolidated Appropriations Act (CAA), set to expire on July 1, would be made available through December 31, 2021, for eligible employers. In addition, startup businesses established after February 15, 2020, with annual gross receipts of up to $1 million and that otherwise do not meet the ERC eligibility tests would now be eligible for the ERC. The startup ERC is capped at $50,000 per quarter, per employer, and the credit would be computed under the regular ERC rules. The revised ERC rules also include a new provision for “severely financially distressed employers,” which is defined as an employer that experienced a gross receipts reduction of more than 90 percent as compared to the same quarter in 2019. If an employer meets this definition, it may treat all wages paid to employees as qualified wages, regardless of the number of full-time employees. Finally, the ARPA includes a provision to extend the normal three-year statute of limitations to five years for the IRS to make an assessment of any amount attributable to the ERC. The amendments to the ERC made by the ARPA are effective for calendar quarters after June 30, 2021.
https://www.bkd.com/alert-article/2021/03/senate-passes-latest-covid-19-stimulus-bill
