The Employee Retention Credit (ERC) program is still offering financial relief to businesses that were impacted by the pandemic. This program provides eligible employers a tax credit for qualifying wages, and health insurance paid to employees in 2020 and 2021.
While you can retroactively apply for the credit, there are still specific deadlines you must meet.
It’s essential to plan ahead and focus on submitting one application at a time, so you don’t miss out on any potential savings.
Be on Time
The ERC application deadline for the 2020 tax year is April 15, 2024. This credit could apply to all three eligible quarters – Q2, Q3, and Q4. The ERC applies also to March 12, 2020 to March 31, 2020, this portion of Q1 is included in Q2. You can claim the ERC for the first three quarters of 2021 by April 15, 2025. Here’s why:
Any Form 941, Form 943, Form 944, Form 945, or Form 1042 filed for any period ending with or within a calendar year before April 15th of the succeeding year is deemed filed on April 15th of the succeeding year, even if the return is required to be filed before that date. If the return is filed after April 15th of the succeeding calendar year, the assessment period is three years from the date the return is filed. See IRC 6501(b)(2) and Treas. Reg. 301.6501(b)–1(b).
While these dates may seem far away, it’s still best to apply as soon as possible. The IRS has reported a significant backlog in processing applications, so applying early will ensure your business receives its credit funds quickly.
Do you qualify?
Before applying, make sure your business qualifies.
For 2020:
- 100 employees or less
- 50% decline in gross receipts when comparing any quarter in 2020 to the same quarter in 2019 OR
- Affected by a government shutdown mandate
For 2021:
- 500 employees or less
- 20% decline compared to the same quarter in 2019 OR
- Affected by a government shutdown mandate
·At Boris Benic and Associates, we offer tax services that maximize your return and boost your bottom line. Our tax professionals have a wealth of experience to assist you with any tax concerns you may have. Use this link to schedule a meeting with us today: https://www.bbcpas.com/get-started/