How Does An Eligible Employer Identify The Average Number Of Full-Time Employees Employed During 2019? – #31 ERC IRS Notice 2021-20

Question #31:
How does an eligible employer identify the average number of full-time employees employed during 2019?

Found under the G. Qualified Wages 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 #31, How does an eligible employer identify the average number of full-time employees employed during 2019?, can be found below.

ERC IRS Notice 2021-20 Question #31:

G. Qualified Wages

How does an eligible employer identify the average number of full-time employees employed during 2019?

The term “full-time employee” means an employee who, with respect to any calendar month in 2019, had an average of at least 30 hours of service per week or 130 hours of service in the month (130 hours of service in a month is treated as the monthly equivalent of at least 30 hours of service per week), as determined in accordance with section 4980H of the Code.

 An employer that operated its business for the entire 2019 calendar year determines the number of its full-time employees by taking the sum of the number of full-time employees in each calendar month in 2019 and dividing that number by 12. An employer that started its business operations during 2019 determines the number of its full-time employees by taking the sum of the number of full-time employees in each full calendar month in 2019 in which the employer operated its business and dividing that sum by the number of full calendar months in 2019 in which the employer operated its business.

An employer that started its business operations during 2020 determines the number of its full-time employees by taking the sum of the number of full-time employees in each full calendar month in 2020 in which the employer operated its business and dividing by that number of months, consistent with the approach described above for employers that began business operations during 2019.

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 How does an eligible employer identify the average number of full-time employees employed during 2019? – #31 ERC IRS Notice 2021-20

The answer to Question #31: “How does an eligible employer identify the average number of full-time employees employed during 2019?” was answered in detail above. It was found under section “G. Qualified Wages” in IRS Notice 2021-20. 

Leave a comment below if you have further questions on the Employee Retention Credit (ERC) or for clarifications on How does an eligible employer identify the average number of full-time employees employed during 2019?

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Cover Image Credit: Irs.gov / IRS Notice 2021-20 / Disaster Loan Advisors.

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