IRS Issues Guidance On Two Pandemic Relief Programs
The Internal Revenue Service (IRS) recently issued updated guidance concerning the Families First Coronavirus Response Act’s (FFCRA) refundable paid sick and family lave tax credits, which Congress has extended through March 31, 2021. As a reminder, the FFCRA provided businesses with tax credits to cover certain costs of providing employees with paid sick leave and expanded family and medical leave for reasons related to COVID-19.
MSCI encourages its members to read the detailed guidance here.
The IRS also recently issued a statement encouraging employers to claim the Employee Retention Tax Credit (ERTC), which was first passed in spring 2020 and was enhanced by legislation enacted into law last December. As Connecting the Dots reported previously, that bill extended the ERTC until June 30, 2021.
That bill also:
- Increased the credit percentage from 50 percent to 70 percent;
- Raised the amount of qualifying wages per employee from $10,000 for the year to $10,000 per quarter;
- Changed the gross receipts test from a 50 percent quarterly decline when compared to the prior-year quarter to a 20 percent decline; and
- Increased the full-time employee threshold from 100 to 500.
As a reminder, last June MSCI signed a letter with several other organizations asking for improvements to the ERTC.