Client desires to file for ERC based on Gross Receipts. In comparing gross receipts by quarter for 2020 to 2019 he meets the requirements for each quarter per the ERC rules. Also, the gross receipts of the first two quarters of 2021 meet the criteria. I have the following basic questions and this is the first client I have had to file for ERC. In reading the rules, the 2020 year begins with the date of March 13; what does this mean when comparing the first quarter of 2020 to the same quarter in 2019 with this date of March 13? Second question, for the year 2020, the rules say, "Employer's offset is employer's Social Security taxes". What does this mean when the qualified wages are 50% of $10,000 per employee for the year or $5,000 per employee? Is it only the employer's SS taxes that are reduced or is it wages that are the basis for the reimbursement to the employee? For the first two quarters of 2021, the percent of wages increases to 70% or $7,000 per employee per calendar quarter with SS taxes being the offset. Same question as I stated for 2020 on what is the employer reimbursed for, wages or just the SS tax? For the third and fourth quarters of 2021, the tax offset is changed to employer's portion of the Medicare tax. What is the employer reimbursed for? The employer is a plumbing business and they have less than 10 employees in any quarter. They have a payroll service and they have made them aware that the employer will be giving them information as to which quarters need to have amended 941's to be filed. I would greatly appreciate assistance on this case. Thanks very much.
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I've been seeing payroll services doing the calculations and amending the payroll tax returns. Then the tax preparer amends the income tax returns. Are you working with their payroll company? -
The client so far has been talking with the payroll service. I will get involved as needed with his payroll service. Based on what I have written I am trying to understand some basics about ERC, namely, is the reimbursement based on the wages and related payroll tax or one or the other. If you will clarify what the employer gets reimbursed for related to the eligible quarters.Comment
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Here's a chart to get you started, but the IRS has an entire section on the ERC. https://www.irs.gov/newsroom/employe...mparison-chartComment
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