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Employee Retention Credit (Under Cares Act)

5/17/2022

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Information regarding the Employee Retention Credit (ERC) (As applied to employers with fewer than 100 employees)

To qualify, employers must meet one of the following criteria:
  • Business must have been suspended or suffered reduced business hours due to a governmental order. Credit APPLIES ONLY to the portion of the quarter the business is suspended, not the entire quarter.
  • Business must have experienced a decline in gross receipts as follows:
    • ​​2020 - CARES ACT - More than 20% reduction of gross receipts in the same quarter as compared to 2019
    • 2021 - CONSOLIDATED APPROPRIATIONS ACT 
      • ​Impacted by forced closures or quarantines OR
      • More than 20% reduction of gross receipts in the same quarter as compared to 2019
    • *NEW BUSINESSES HAVE SPECIAL RULES WHICH WILL APPLY
    • 2021 - AMERICAN RESCUE PLAN ACT
      • Provides special rules for a "Recovery Startup Business" (RSB)
      • This applies to new businesses starting after February 15, 2020
    • 2021 - INFRASTRUCTURE INVESTMENT AND JOBS ACT
      • Removes an eligibility condition for RSB's. Essentially all RSB's are eligible for 4th quarter
  • Qualifying Wages - Wages subject to FICA AND Qualified Health Expenses
    • 2020
      • Paid after 3/12/20 through 12/31/20
        • 50% of qualified wages of up to $10,000 for the YEAR (per employee, maximum credit of up to $5,000 per employee)
    • 2021
      • Paid in first 3 quarters of 2021 (1/1/21 - 3/31/21; 4/1/21 - 6/30/21; 7/1/21 - 9/30/21)
        • 70% of qualified wages of up to $10,000 EACH QUARTER (per employee, maximum credit of up to $7,000 per employee PER QUARTER)
  • Consolidated Appropriations Act (CAA)
    • This Act allows employers who received a PPP Loan (forgiven) to still qualify for the ERC for any wages not paid with proceeds from the forgiven portion of the PPP Loan

Refunds are still available by filing of amended forms 941 (3 year statute)

For more information visit www.irs.gov/newsroom/new-law-extends-covid-tax-credit-for-employers-who-keep-workers-on-payroll

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Filing Deadline for Individual Taxpayers Extended

3/24/2021

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The filing deadline for individual income tax returns has been extended from April 15 to May 17, 2021 for the 2020 tax year. The state of West Virginia has also extended the filing deadline to May 17, 2021. It is important to note that this extension applies to filing and payment of 2020 tax due, but does not extend the due date for quarterly estimated tax payments due April 15, 2021 (first quarter 2021). In 2020 the filing deadline extension did extend the deadline for first quarter estimated tax payments, but that will not be the case for 2021.
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Unemployment Compensation Exclusion

3/24/2021

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The Internal Revenue Service has announced preliminary guidance for the exclusion of up to $10,200 of unemployment compensation benefits per individual for the tax year 2020. Phase out limits do apply, but for the majority of taxpayers receiving unemployment compensation benefits this exclusion will greatly reduce their tax burden. Those who have already filed their tax return should wait to file an amended return. IRS believes they will be able to adjust the returns which were filed prior to the exclusion being enacted, meaning that an amended tax return may not be necessary.

States are not bound by the $10,200 exclusion. Governor Justice (WV) has stated that West Virginia will follow the federal exclusion, but that bill has not been passed into law as of this date.
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