Question #67:
May third-party payers rely on client employer information regarding the employee retention credit?
Found under the M. Special Issues for Employers: Use of Third-Party Payers 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 #67, May third-party payers rely on client employer information regarding the employee retention credit?, can be found below.
ERC IRS Notice 2021-20 Question #67:
M. Special Issues for Employers: Use of Third-Party Payers
May third-party payers rely on client employer information regarding the employee retention credit?
Yes. If a third-party payer (such as a CPEO, PEO, or other section 3504 agent) is claiming the employee retention credit on behalf of the client employer, the third-party payer may rely on the client employer’s information regarding the client employer’s eligibility to claim the employee retention credit.
Either the third-party payer or the client employer may maintain all records which substantiate the client employer’s eligibility for the employee retention credit. However, if the client employer maintains the records, upon request by the IRS, the third-party payer must obtain from the client employer and provide to the IRS records that substantiate the client employer’s eligibility for the employee retention credit. The client employer and the third-party payer will each be liable for employment taxes that are due as a result of any improper claim of the employee retention credit amounts that are improperly claimed in accordance with their liability under the Code and applicable regulations for the employment taxes reported on the federal employment tax return filed by the third-party payer on which the credit was claimed.
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 May third-party payers rely on client employer information regarding the employee retention credit? – #67 ERC IRS Notice 2021-20
The answer to Question #67: “May third-party payers rely on client employer information regarding the employee retention credit?” was answered in detail above. It was found under section “M. Special Issues for Employers: Use of Third-Party Payers” in IRS Notice 2021-20.
Leave a comment below if you have further questions on the Employee Retention Credit (ERC) or for clarifications on May third-party payers rely on client employer information regarding the employee retention credit?
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