Last year, the CARES Act granted businesses and nonprofits a payroll tax credit, but due to its several restrictions most clients were unable to qualify. The newly passed Taxpayer Certainty and Disaster Tax Relief Act of 2020, a part of the Consolidated Appropriations Act of 2021, drops many of the restrictions. In so doing, the new law frees up potentially millions in credits for qualified employers due to the expanded Employee Retention Tax Credit (ERTC), now applicable through the first two quarters of 2021. The major changes are:
- increase the credit percentage from 50% to 70% of qualified wages.
- increase the creditable