There's Still Time to Claim the Employee Retention Credit!

Even though the Employee Retention Tax Credit (ERTC) ended in 2021, eligible businesses still have time to claim the credit if they qualify. Eligible employers can utilize the credit against applicable employment taxes and qualified wages paid until December 31, 2021.

Businesses can still claim the credit on amended payroll tax returns as long as the statute of limitations is open, which is three years from the filing date.

The ERTC, created by the CARES Act and extended by the CAA and ARPA, encourages businesses to retain employees. The credit applies to wages paid from March 13, 2020, to December 31, 2021, and can be claimed by eligible private-sector businesses and tax-exempt organizations. There is no size limit on eligibility, but small and large businesses have different criteria. The credit is based on factors like a government-ordered shutdown, gross receipts decline, or being a "recovery startup" business.

For 2021, eligible employers can receive 70% of the first $10,000 of qualified wages per employee in each qualifying quarter. The IRS issued guidance on August 4, 2021, addressing changes made by the ARPA for the third and fourth quarters of 2021. Employers will report qualified wages on their employment tax returns, and if needed, may receive an advance payment from the IRS.

To claim the ERTC, eligible businesses should file with their quarterly Form 941 tax filings due on July 31, October 31, and December 31, 2021.

Once your application is accepted, the IRS will send you a check for up to 70 percent of the wages you paid out during the pandemic. Call our office and we can help you file a claim!