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Smith Leonard Details Changes Made to the Employee Retention Credit
Accounting and consulting firm Smith Leonard has provided retailers the changes made to the Employee Retention Credit (ERC) in the Consolidated Appropriations Act of 2021, signed into law on Dec. 27, 2020.
The ERC, which was created by the CARES Act on March 27, 2020, is designed to encourage employers (including tax-exempt entities) to keep employees on their payroll and continue providing health benefits during the coronavirus pandemic. The ERC is a refundable payroll tax credit for wages paid and health coverage provided by an employer whose operations were either fully or partially suspended due to a COVID-19-related governmental order or that experienced a significant reduction in gross receipts.
Employers may use ERCs to offset federal payroll tax deposits, including the employee FICA and income tax withholding components of the employer’s federal payroll tax deposits.
For Smith Leonard’s report on changes to the ERC from 2020 to 2021, click here.