The American Rescue Plan passed in March included an extension and expansion of the Employee Retention Tax Credit (ERC). While the IRS has published guidance covering the credit’s provisions for 2020 and the changes applicable to the first half of 2021, they have yet to issue a Notice or even an FAQ related to changes in the third and fourth quarters of 2021. The absence of guidance after the third quarter has already begun placing taxpayers at a disadvantage when it comes to planning.
The lack of guidance has gotten the attention of Congress. On July 9, 2021, Senator Maggie Hassan (D-NH) wrote a letter to IRS and the Treasury Department asking for this guidance to be expedited. She wrote:
“Full guidance is necessary to provide certainty to small businesses that are newly eligible for the ERTC and to ensure that these businesses have full access to this assistance during the recovery from COVID-19. I urge the Treasury and IRS to issue updated ERTC guidance as soon as possible, to assist small businesses owners in understanding this guidance, and to perform educational outreach to ensure that new businesses are aware of how to fully access the ERTC.”