By this point, you’ve probably seen plenty of ads about the Employee Retention Tax Credit (ERC/ERTC). The IRS has already received millions of ERC claims, and if you’re a small business owner that hasn’t yet applied for the tax credit, you might be concerned that it’s too late to see if you qualify. The program began in March 2020, but are ERC tax credits still available to business owners who still need to apply?
ERC Tax Credit Availability
The ERC is a fully refundable payroll tax credit that businesses can claim on qualified wages paid to their employees if they kept staff on payroll even in the wake of significant financial setbacks during the height of the COVID-19 pandemic. The tax credit may be for quarterly payroll tax filings from 2020 and 2021, but you and your business could be eligible to claim this credit now – before time runs out.
If you are interested in applying for the ERC but haven’t done so already, there are a couple of deadlines for filing an ERC claim coming up fairly soon that you need to be aware of.
For all quarters in 2020, the deadline to apply for the Employee Retention Credit is April 15, 2024, and for all quarters in 2021, the deadline is April 15, 2025. At this time, businesses can still take a look at wages paid after March 12, 2020, through the end of the program and apply retroactively for the ERC if they qualify.
IRS Warning about ERC Tax Credit Availability
However, due to fraud in the program, the IRS has warned that the availability of the ERC might become more limited in the future.
In July, IRS Commissioner Danny Werfel spoke at a special roundtable session of tax professionals in Atlanta and revealed that more than 2.5 million claims have come in since the ERC program was enacted. Additional effort is now being put in to make sure legitimate businesses will receive the money they are legally allowed to claim through the Employee Retention Credit program.
“The amount of misleading marketing around this credit is staggering, and it is creating an array of problems for tax professionals and the IRS while adding risk for businesses improperly claiming the credit,” Werfel said.
“This was not how the law was meant to work, and Congress can help with this situation,” he added. “We will work with the Treasury [Department] to explore legislative solutions we can share with Congress to help address fraud and error, including potentially putting an earlier ending date for businesses to claim the credit and increase IRS oversight of return preparers.”
While ERC tax credits are still available now, that could change if the IRS continues to run into issues with businesses incorrectly claiming the credit when they are not actually eligible to do so.
We recommend getting your ERC tax credit claim sooner rather than later, so even if the IRS and Congress make changes in the availability of the credit, your application will already be submitted for consideration. If you would like assistance in applying for the credit to make sure all of your information is as accurate as possible, you might want to work with an ERC team like the one at Dayes Law Firm.
At Dayes, our team and our partners have helped other businesses in filing for more than $250 million in ERC refunds so far, and we’d be happy to assist you, too. Please feel free to give us a call or fill out the form on this page to get in touch.
Our firm can offer a free, no-obligation consultation to discuss your ERC application needs and to work with you to get your claim submitted in short order. If you are eligible, we want to make sure ERC tax credits are still available to you and your business – you earned them, and you’re entitled to those funds. Call today to learn more!