tax and accounting certified public accountants

Newsletter – January 2023 Tax Updates

tax and accounting certified public accountants

2022 saw major updates to many key tax regulations. In this newsletter we see some of those changes and how you use them today to start planning for your future.  

One key change that was set to take effect in 2023 was the reporting requirement for third party payment processors – Paypal or Stripe to name a couple – The new rule is any transactions which in the aggregate will exceed $600 must now be reported on forms 1099. This change is expected to impact millions of taxpayers who previously had not had to report sales online. The IRS has delayed implementation of this rule to allow processors time to update their systems to cope with the massive reporting requirements.  Check out this article on Forbes for more information. 

IRS also announced that tax payers can expect smaller refunds this year. This is in large part due to the elimination of COVID era credits and refunds which have not been extended for the 2022 filing season. 

People with dependents will see a large decrease in the amount of credits they are eligible for as the child tax credit has been reduced back down to pre-2020 levels. 

Read our Newsletter for more information on these and other topics you won’t want to miss this tax season. 

As always, please Contact Us if you have any questions about how you can save on taxes. 


Chris Nash
Certified Public Accountant

employee retention credit save money cpa firm taxes erc ertc

Claiming the Employee Retention Credit in 2021 – A Simple Guide

Dear Reader:

The IRS has issued guidance for employers claiming the employee retention credit enacted by the American Rescue Plan Act of 2021 (ARP), which provides a credit for wages paid after June 30, 2021, and before January 1, 2022. The guidance amplifies previous notices which addressed the employee retention credit created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), then extended and expanded under the Consolidated Appropriations Act, 2021.

In general, eligible employers can claim a refundable employee retention credit against the employer share of Social Security tax equal to 70 percent of the qualified wages they pay to employees after December 31, 2020, through June 30, 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum employee retention credit available is $7,000 per employee per calendar quarter, for a total of $14,000 for the first two calendar quarters of 2021. Under the guidance, these limits continue to apply in the third and fourth calendar quarters in 2021.

The guidance explains changes made to the employee retention credit for the third and fourth calendar quarters of 2021, including:

·         making the credit available to eligible employers that pay qualified wages after June 30, 2021, and before January 1, 2022;

·         expanding the definition of eligible employer to include “recovery startup businesses”;

·         modifying the definition of qualified wages for “severely financially distressed employers”; and

·         providing that the credit does not apply to qualified wages taken into account as payroll costs in connection with a shuttered venue grant under the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, or a restaurant revitalization grant under the ARP.

Recovery Startup Businesses

A “recovery startup business” is an employer:

·         that began carrying on any trade or business after February 15, 2020;

·         for which the average annual gross receipts of the employer for the three tax year period ending with the tax year that precedes the calendar quarter for which the credit is determined does not exceed $1,000,000; and

·         that is not otherwise an eligible employer due to a full or partial suspension of operations or a decline in gross receipts.

For an eligible employer that is a recovery startup business, the amount of the credit allowed for each of the third and fourth calendar quarters of 2021 cannot exceed $50,000.

Qualified Wages

The rules for determining the average number of full-time employees continue to apply in the third and fourth calendar quarters of 2021. However, the Code provides a different rule for qualified wages paid by “severely financially distressed employers.” For the third and fourth calendar quarters of 2021, an eligible employer with gross receipts that are less than 10 percent of the gross receipts for the same calendar quarter in calendar year 2019 (or 2020, if the employer was not in existence in 2019) is a severely financially distressed employer. For the third and fourth calendar quarters of 2021, a severely financially distressed employer that is a large eligible employer may treat all wages paid to its employees during the quarter in which the employer is considered severely financially distressed as qualified wages.


Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their employment tax returns for the applicable period. If a reduction in the employer’s employment tax deposits is not sufficient to cover the credit, certain employers may receive an advance payment from the IRS by submitting an advance form.

Contact Us

Please call our office at (253) 752-9522, your business may have an opportunity to take advantage of the expansion of the employee retention credit in the third and fourth quarters of 2021.


Christopher T. Nash

Certified Public Accountant