Question #24:
What are “gross receipts” for an employer other than a tax-exempt organization?
Found under the E. Significant Decline in Gross Receipts section of the Employee Retention Credit (ERC) IRS Notice 2021-20 with updated guidance to help business owners follow the current ERC rules.
The answer to question #24, What are “gross receipts” for an employer other than a tax-exempt organization?, can be found below.
ERC IRS Notice 2021-20 Question #24:
E. Significant Decline in Gross Receipts
What are “gross receipts” for an employer other than a tax-exempt organization?
Gross receipts” for purposes of the employee retention credit, for an employer other than a tax-exempt organization, has the same meaning as when used under section 448(c) of the Code. Under the section 448(c) regulations, “gross receipts” means gross receipts of the taxable year and generally includes total sales (net of returns and allowances) and all amounts received for services. In addition, gross receipts include any income from investments, and from incidental or outside sources.
For example, gross receipts include interest (including original issue discount and tax- exempt interest within the meaning of section 103 of the Code), dividends, rents, royalties, and annuities, regardless of whether those amounts are derived in the ordinary course of the taxpayer’s trade or business. Gross receipts are generally not reduced by cost of goods sold, but are generally reduced by the taxpayer’s adjusted basis in certain property used in a trade or business or capital assets sold. Gross receipts do not include the repayment of a loan, or amounts received with respect to sales tax if the tax is legally imposed on the purchaser of the good or service, and the taxpayer merely collects and remits the sales tax to the taxing authority.
For more information about the Employee Retention Credit (ERC) IRS Notice 2021-20, visit the Internal Revenue Service (IRS) Department of the Treasury, official IRS.gov tax website.
Conclusion and Summary on What are “gross receipts” for an employer other than a tax-exempt organization? – #24 ERC IRS Notice 2021-20
The answer to Question #24: “What are “gross receipts” for an employer other than a tax-exempt organization?” was answered in detail above. It was found under section “E. Significant Decline in Gross Receipts in IRS Notice 2021-20.
Leave a comment below if you have further questions on the Employee Retention Credit (ERC) or for clarifications on What are “gross receipts” for an employer other than a tax-exempt organization?
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Cover Image Credit: Irs.gov / IRS Notice 2021-20 / Disaster Loan Advisors.
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