OREGON ASSOCIATION OF TAX CONSULTANTS AUGUST 19, 2021

OREGON ASSOCIATION OF TAX CONSULTANTS

AUGUST 19, 2021

Employee Retention Credit


• Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

• Relief Act of 2020

• American Rescue Plan (ARP) of 2021

Employee Retention Credit | Stakeholder Liaison3 Date


March 12, 2020, through December 31, 2020

A fully refundable tax credit for employers equal to 50 percent of qualified wages (including certainhealth plan expenses) that Eligible Employers pay their employees.

January 1, 2021, through December 31, 2021

A fully refundable tax credit for employers equal to 70 percent of qualified wages (including certainhealth plan expenses) that Eligible Employers pay their employees.

DateEmployee Retention Credit | Stakeholder Liaison4

Eligible EmployerCarrying on a trade or business that:

1. Was fully or partially suspended by government order due to COVID-19 (2020 or 2021)

2. Gross Receipts Test:

• For 2020, a significant decline in gross receipts (defined as period beginning with calendar quarter in which gross receipts are less than 50 percent of gross receipts in the same calendar quarter in 2019 and ending in the calendar quarter after the first calendar quarter in which gross receipts are greater than 80 percent of gross receipts in the same calendar quarter in 2019).

• For 2021, a decline in gross receipts (defined as quarter in which gross receipts are less than 80 percent of the same calendar quarter in 2019).

3. Recovery startup business (3rd & 4th quarter 2021)• Self-employed individuals are not eligible for their own services and earnings• Household Employers are not eligible for the employee retention credit with respect to their

household employees Employee Retention Credit | Stakeholder Liaison5 Date

Qualified WagesFor 2020:

Employers with 100 or less FT employees:• Credit based on wages paid to all employees, regardless of whether they

provided services

Employer with more than 100 FT employees: • Credit is based on wages paid only to employees who did not provide

services due to a suspension or decline in gross receipts

For 2021:

• The threshold was 100 or less FT employees or more than 100 FT employees

• Severely financially distressed employer • Credit is based on wages paid to all employees


Claiming the credit• Report qualified wages and credits for each calendar quarter on

federal employment tax return.

• Tax credit may be claimed against the employer share of Social Security tax for wages paid 3/13/2020 – 6/302021 and against employer share of Medicare tax for wages paid 7/1/2021-12/31/2021.

• Tax credit is refundable, and the employer may reduce employment tax deposits in anticipation of the credit.

• If credit exceeds payroll deposits, small employers may request an advance refund per Form 7200, Advance Payment of Employer Credits Due To COVID-19.


Impact of other credit provisions

Small Business Loan – Paycheck Protection Program (PPP) • "Retroactive to the March 27, 2020, enactment of the

CARES Act, the law now allows employers who received Paycheck Protection Program (PPP) loans to claim the ERC for qualified wages that are not taken into account as payroll costs in obtaining forgiveness of a PPP loan"


Impact of other credit provisions – ARP


Employer cannot claim the ERC for wages taken into account for purposes of the following grants:

• Shuttered Venue Operator Grant under section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act;

• Restaurant revitalization grants under section 5003 of the American Rescue Plan Act of 2021; or

• PPP loans

Impact of other credit provisions• 41 Credit for increasing research activities

• 45A Indian Employment Credit

• 45P Employer wage credit for members of uniformed services

• 45S Employer credit for paid family and medical leave

• 51 Amount of credit (Amount of Work Opportunity Credit)

• 1396 Empowerment zone employment credit

• 3131 Credit for Paid Sick Leave

• 3132 Credit for Paid Family Leave

• Employee Retention Credit for Tax-Exempt Employers Affected by Qualified Disasters


Resourceshttps://www.irs.gov/newsroom/new-law-extends-covid-tax-credit-for-employers-who-keep-workers-on-payroll

IRS provides guidance for employers claiming the Employee Retention Credit for first two quarters of 2021

FAQs: Employee Retention Credit under the CARES Act

Employers May Be Able to Claim the Employee Retention Credit and Have a PPP Loan

Form 7200, Advance Payment of Employer Credits Due to COVID-19


https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

https://www.irs.gov/newsroom/irs-provides-guidance-for-employers-claiming-the-employee-retention-credit-for-first-two-quarters-of-2021

https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

https://www.irs.gov/forms-pubs/employers-may-be-able-to-claim-the-employee-retention-credit-and-have-a-ppp-loan

https://www.irs.gov/forms-pubs/about-form-7200

Resources con’tNotice 2021-20 - Guidance on the Employee Retention Credit under Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act

Notice 2021-23 - Guidance on the Employee Retention Credit under the CARES Act for the First and Second Calendar Quarters of 2021

About Form 941, Employer's Quarterly Federal Tax ReturnInformation about Form 941, Employer's Quarterly Federal Tax Return, including recent updates, related forms and instructions on how to file.


https://www.irs.gov/pub/irs-drop/n-21-20.pdf

https://www.irs.gov/pub/irs-drop/n-21-23.pdf

https://www.irs.gov/forms-pubs/about-form-941

Resources con’t

Brand New in August:Notice 2021-49: ERC Guidance for 3Q and 4Q 2021Rev. Proc. 2021-33 Safe Harbor for Gross ReceiptsCheck it out-part of ARP:IRC Section 3134 Employee Retention Credit


Tax Pro Account Walk-Thru

Paper submission, paper processing.

Characteristics:• Physical receipt of forms

through mail

• Sorting and review process up to 15 days**

• Paper stored in IRS files until shredded

Mail*Electronic submission via fax, electronic processing.

Characteristics:• Electronic receipt of form

images

• Review and Centralized Authorization File (CAF) entry up to 15 days**

• Online storage and records management

Fax* Taxpayer Digital Communications (TDC)* Tax Pro Account Electronic submission of Forms 2848/8821 via TDC, electronic processing.

Characteristics:• Secure Access account required for submission

• Authorized third-party access to platform

• Image of electronic signature

• Review and CAF entry up to 15 days**

• Online storage and records management

Electronic submission of online equivalents of Forms 2848/8821 via Tax Pro Account, electronic processing. Characteristics:• Dedicated interface for tax professionals

integrated with individual taxpayers’ Online Account for taxpayer access to approve or reject authorization requests online

• Secure Access via eAuth allows for identify and signature authentication

• CAF integration for real-time processing --requests are submitted, validated and approved online with no manual intervention

• Electronic capture and storage of tax professional and taxpayer digital signatures using Electronic Signature Storage and Retrieval (ESSAR)

• IAL2/AAL2 compliant using Secure Access LOA-3 (NIST 63-3 compliant by FY2022)

Deployed January 2021 To Deploy July 2021

*Forms submitted via Mail, Fax, and TDC are processed in First In, First Out (FIFO) basis.**Typical processing timeframe is 5 days; however, timeframe was extended to up to 15 days due to COVID.

15 Tax Pro Account

Tax Pro Account: Methods to Submit POAs and TIAs

Individuals have various options when submitting Power of Attorneys (POAs) and Tax Information Authorizations (TIA) to the IRS.

5/11/2021

Expanding Services for Taxpayers

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New Taxpayer Options for POA and TIA

Features launching summer 2021:

• IRS adds “authorization” feature to individual Online Accounts.• IRS launches Tax Pro Account on IRS.gov to allow tax professionals

to initiate online third-party authorization requests.• Tax professional initiates a POA or TIA, uses checkbox as electronic signature for

POAs.• POA or TIA requests automatically transfers to individual taxpayer’s Online

Account.• Taxpayer accesses their Online Account and select “Authorization” tab.• Taxpayer uses checkbox as signature and approves request.• Upon approval, authorization is automatically submitted to CAF.

• Most requests post immediately to CAF eliminating long waits for review and processing.

• Online Account and Tax Pro Account protected by identity proofing/multi-factor authentication (Secure Access).

Tax Pro Account 4/22/2021

17

To use the Tax Pro Account, individuals must register for Secure Access.

Registering for Secure Access

• Individuals already registered for secure access (e.g., Get Transcripts) can use the Tax Pro Account to initiate POAs and TIAs.

• To register for secure access, you will need:

• Your email address• Your tax filing status, personal information, and mailing address from your

most recently filed tax return• Your Social Security Number (SSN) or Individual Tax Identification Number

(ITIN)• One financial account number linked to your name (credit card, student loan,

mortgage or home equity loan, home equity line of credit, or auto loan)• Your U.S. based cell phone to receive the one-time activation code

• If you do not have a cell phone, you can opt to receive the activation code through mail

Note: For more information on Secure Access, see IRS.gov/Secure Access

5/11/2021Tax Pro Account

18

Tax Pro Account: Secure Access

Secure Access


Notional

19

Tax Pro Account: Log In

Secure Log In


Notional

Tax Pro Account: Request POA

Tax Pro Account Home Page (Full Screen)

20

Notional



21

Before You Start Page (Screen 1 of 2)

Notional



22

Before You Start Page (Screen 2 of 2)

Notional



23

Representative Information page - Step 1 (Screen 1 of 2)

Notional



24

Representative Information page - Step 1 (Screen 2 of 2)

Notional



25

Client Information page - Step 2 (Screen 1 of 2)

Notional



26

Client Information page - Step 2 (Screen 2 of 2)

Notional



27

Tax Matters page - Step 3 (Full Screen)

Notional



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Tax Matters Expanded page - Step 3 (Screen 1 of 2)

Notional



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Tax Matters Expanded page - Step 3 (Screen 2 of 2)

Notional



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Review and Submit page (Step 4) – Screen 1 of 2

Notional



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Review and Submit page (Step 4) – Screen 2 of 2

Notional



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Confirmation Page (Screen 1 of 2)

Notional



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Confirmation Page (Screen 2 of 2)

Notional


Tax Pro Account: Taxpayer Respond to POA Request

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Authorizations Tab in Online Account (Full Screen)

Notional



35

Taxpayer Views Pending POA Request (Screen 1 of 2)

Notional



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Taxpayer Views Pending POA Request (Screen 2 of 2)

Notional



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Taxpayer Successfully Approves a POA Request (Screen 1 of 2)

Notional



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Taxpayer Successfully Approves a POA Request (Screen 2 of 2)

Notional


• After taxpayer signs and approves authorization, the IRS again checks to see if tax professional is in good standing.

• If authorization clears validation, it is posted immediately (at least within 48 hours) to the Centralized Authorization File (CAF).

• Ability to have multiple representatives per authorization:• Each tax professional initiates authorization from their

own Tax Pro Account• Taxpayer must sign all authorizations on the same day.• Only two tax professionals can elect to receive copies

of IRS notices and communications sent to taxpayer• If more than two tax professionals make an election, after

approval of the first two authorization by the taxpayer, the remaining authorizations will not be processed.

39 Tax Pro Account

Tax Pro Account: Authorization Processing

5/11/2021

• IRS will continue to build on this initial release of Tax Pro Account to improve its features for authorization requests and, in later years, to add functionality as resources allow. Additional features requested and considered:• Tax professional’s ability to view their authorization

history, to include pending requests and statuses.• Notification to the taxpayer regarding action in their

Online Account, to include pending authorization requests.

• Taxpayer’s ability to view their complete authorization history.

• IRS is also aware some taxpayers have difficulty creating Online Accounts (e.g., can’t pass Secure Access registration) and is working on that issue.

40 Tax Pro Account

Tax Pro Account: Future State

5/11/2021

Helping Pacific Northwest Low and No-Income Families

Get the 2021 Advance Child Tax Credit Payments A Call to Action for Oregon community organizations and

interested parties

presented byIRS Stakeholder Liaison

Communications & Liaison STAKEHOLDER LIAISON

41

1. Raises the maximum qualifying age

2. Increases the maximum credit amount

3. Makes the credit fully refundable

4. Removes the minimum income requirement

5. Provides advance payments

What’s new about the CTC in 2021? American Rescue Plan Act (ARPA)…

42

Eligibility for the newly expanded CTC 43

United States Residence

Taxpayer Identification

Number –Filer

2021 Modified Adjusted

Gross IncomeQualifying

Child

✔Based on the most current year tax filing from either 2020 or 2019✔Paid Monthly✔From July 15, 2021, to

December 15, 2021✔50% of the estimated 2021

child tax credit✔Amount can be adjusted

through IRS Online Portal

Advance child tax credit

payments are prepayments

of the taxpayer’s

estimated 2021 child tax credit

Advance Payment Of Child Tax Credit 44

Filing a paper or

electronic tax return or

using the new

Non-filer Sign-up Tool

will allow:

• You to give us your informationo Qualifying children (2020)

• Us to automatically determine your eligibility

• Us to issue advance payments based on the information you give us

• You to also get:o 2020 Recovery Rebate Credito Third Economic Impact Payment

45Non-Filers Must File a 2020 Return or use New Non-Filers: Submit Your Information Tool

Non-Filers: Submit Your Information Tool 46

Pub 5538 Guide to Using the

Non-filer Sign-up Tool @IRS.gov 47

# of Family Members

1 Adult1 Child over 5

2 Adults1 Child over 5

2 Adults2 Children over 5

Advance CTC Payments* $1,500 $1,500 $3,000

EIP 1 - RRC $1,700 $2,900 $3,400EIP 2 - RRC $1,200 $1,800 $2,400EIP 3 $2,800 $4,200 $5,600

Totals: $7,200.00 $10,400.00 $14,400.00* Add $300 for each child under 6

Potential Payment Amounts

How much money is on the table for 2021? Up to …

48

IRS Promotional Publications @IRS.gov

49

Pub 5534D Pub 5534E Pub 5534F

Use IRS Social Media on Yours 50

#IRS is asking for help from groups that assist vulnerable people to get benefits including Economic Impact Payments and the upcoming advance #ChildTaxCredit. Learn more at http://go.usa.gov/xHJrd

#IRS urges community groups, employers and others to share information about Economic Impact Payments and the upcoming advance #ChildTaxCredit to help more people receive everything for which they're eligible. Get started at http://go.usa.gov/xHJrd

Pub 5537 IRS AdvCTC Partner Toolkit @IRS.gov

51

There is nothing you or anyone else can do to receive payments earlier.

Only the IRS can issue these payments and the earliest any payments could potentially be issued is July 15, 2021.

Do not fall prey to any fictitious offers to get your money faster or earlier.

Wait for and follow only official IRS information found on IRS.gov.

Do not look to unofficial websites, people or businesses for options.

Beware of Scams! 52

Check www.IRS.gov/AdvCTC for the Latest Updates!

53

Search

“AdvCTC Resources”on IRS.gov

for• Frequently Asked Questions

• e-Posters

• Toolkits and User Guides

• Ready-to-Use Articles

• YouTube Videos

• News Releases

• Tax Tips

• Guidance

Thank You! 54

Contact

John or CathyeIRS

Senior Stakeholder Liaisonsfor Advance PaymentsOutreach Resources

&Orientation Webinars

QUESTIONS?

Additional Items ofInterest

[email protected]

[email protected]

Thank You


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OREGON ASSOCIATION OF TAX CONSULTANTS AUGUST 19, 2021

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