At Payroll People, we are so appreciative to each of our clients who trust and rely on us for various business needs. We’d like to take the opportunity to express our appreciation and wish you a happy holiday season with your loved ones. After 40 wonderful years, we continue to put the needs of our valued clients first and look forward to another great year together.
Employee Retention Credit Ended on September 30 for Most Employers
As you may already be aware, the Infrastructure Investment and Jobs Act (The Act) has recently passed Congress and been signed by the president. Among the many provisions contained in The Act, one particular provision specifically interests employers. The Act calls for the early termination of the Employee Retention Credit (ERC) which was originally introduced as part of the CARES Act in 2020. The ERC has been retroactively terminated effective September 30, 2021, for all but a small group of employers that qualify as “Recovery Startup” businesses.A recovery startup business is one that began operations on or after February 15, 2020, and whose average annual gross receipts do not exceed $1 million. Qualified recovery startup businesses may continue to claim the credit through December 31, 2021.
For all other employers, the availability of the credit ended on September 30, 2021. If you are among the many that were claiming the employee retention credit, and are not a qualified Recovery Startup Business, the following are key actions that you should be considering to minimize any negative impact on your business:
- First, you should immediately stop claiming the credit on current and future payrolls processed for fourth-quarter 2021 and forward. Availability of the credit ended on September 30, 2021, and Payroll People will now stop processing the credits.
- Second, you need to consider paying the amount of any credits that you have already claimed for fourth-quarter 2021 as early as possible to help mitigate any penalties that may be due to the IRS as a result of the termination of the credit.
Payroll People is communicating with the IRS and is seeking guidance on when and how employers should pay these underpaid amounts. But it is not yet clear when IRS will publish guidance on this subject. So, we are recommending that you make plans to pay back these credit amounts as early as possible.
Given the nature of the retroactive termination of the credit, it may be that IRS determines to grant relief from penalties for the amounts that were previously anticipated as credits. But lacking clear guidance, it is important that you consider the potential penalty impact of delaying payment of these amounts.
Payroll People is ready to assist you in submitting these payments to the IRS.
Time Tracking Solutions to Improve Your Bottom Line
Time tracking is a challenge that nearly every employer faces. Those who use manual time-tracking solutions, such as paper time sheets, often waste quite a bit of time and effort. Upgrading to a simplified time solution can transform the way your HR department handles payroll. It can also save your business a lot of money. Move beyond outdated time sheets and spreadsheets to process employee time and attendance with proficiency.
The data flows throughout the modules in the HCM platform we deliver. Accurate time and attendance data improves the accuracy of payroll, saving time and money. You can choose from a range of time tracking solutions, including virtual clocks, mobile punching, and office-mounted time clocks with advanced functionality. Contact your customer service rep to find out how this time solution can make your life easier!
Upcoming Important Dates
Friday, December 24: Christmas Eve (Federal Reserve open, Payroll People closed)
Please allow an extra day for PPI Common and electronic deposit accounts.