AICPA Requests Guidance on CARES Act Provisions

AICPA Requests Guidance on CARES Act Provisions

As CPAs and their clients continue to parse the details of the recently passed Coronavirus Aid, Relief and Economic Security (CARES) Act, the AICPA is requesting guidance on several aspects of the bill’s employee retention credit provisions.

In a letter dated April 17 to David Kautter at the U.S. Department of the Treasury and Charles Rettig at the IRS, AICPA tax executive committee chair Christopher Hesse lays out seven key areas where the group believes more information is needed:

  • Guidance related to an employer’s deduction for payroll taxes reduced by the employee retention credit
  • Clarification that Section 2302 of the Act allows employers to defer payments of Social Security taxes originally due on or after March 27, 2020, regardless of when the compensation was earned (as well as similar clarification for self-employed individuals)
  • Clarification on situations when an employee works a reduced schedule but continues to be paid their regular wage – if a portion of the employee’s wages and qualified health care costs can be claimed as a credit
  • Additional guidance regarding the definition of a “partial” suspension of operations for purposes of Section 2301 of the Act
  • Definition of the term “trade or business” for purposes of Section 2301 of the Act
  • Clarification as to whether an employer aggregated under the aggregation rules under Section 2301 of the Act is barred from utilizing the retention credit if another related entity receives an SBA loan
  • Clarification as to whether a not-for-profit organization that has not been fully or partially suspended can use the gross receipts test to qualify for payment of retention pay

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