The Employee Retention Credit (ERC) is extended through December 31, 2021. Farmers may more easily qualify for the credit in the first quarter by looking at gross r...
We have posted several times on the Employee Retention Credit (ERC) and how valuable it may be for many farmers in 2021. It was originally only applicable for the first two quarters of 2021, however, the new Stimulus Bill extends this credit through the 4th quarter of 2021.
This allows a farmer who shows at least a 20% reduction in gross receipts for any quarter in 2021 compared to the same quarter in 2019 to qualify for the credit. The credit is 70% of the employees qualifying wages plus health insurance capped at $7,000 per employee per quarter.
NOTE – For the first quarter of 2021, the employer can elect to compare the fourth quarter of 2020 to the fourth quarter of 2019 and if the reduction in gross receipts is at least 20%, then the first quarter of 2021 automatically qualifies for the ERC.
Farmers should review this with their tax advisor and if you meet this reduction, claim the credit as quickly as you can by:
- Reducing payroll taxes paid in for the quarter;
- Any excess is claimed by filing Form 7200 which can be faxed to the IRS at 855-248-0552; or
- Claiming the credit on your 2021 Form 943.
It may take several weeks for the IRS to process Form 7200 based on feedback we have gotten.
Want to learn more? Complete the form below and we'll be in touch. If you are unable to see the form below, please complete your submission here.Contact us