The Internal Revenue Service this month released draft early publication instructions for IRS Form 6765, “Credit for Increased Research Activities,” to properly reflect the legislation regarding the determination of qualified wages which affects lines 5 and 24 from the December 2020 revision.

Under legislation enacted in December 2020, salaries for skilled services do not include:

  1. Salaries paid or incurred for any employee after December 31, 2020 and before July 1, 2021, if the employer uses the same salary to claim the employee retention credit on an employment tax return such as the IRS form 941, “Employer’s Quarterly Federal Income Tax Return”; and,
  2. Salaries paid or incurred for any employee generally after December 27, 2019 and before April 17, 2021, if the employer uses the same salary to claim the 2020 Qualified Disaster ERC on Form IRS 5884-A, “Employee Retention Credit for Employers Affected by qualified disasters.

As a reminder, do not file draft forms, and do not rely on draft forms, instructions and / or publications for filing until they are finalized by the IRS. The draft instructions for Form 6765 can be viewed here. The IRS is currently accepting comments regarding the draft instructions here. All tax return forms and instructions are expected to be finalized by the IRS by the end of January 2022.


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