The Employee Retention Credit, also known as the ERC or ERTC, was established by the federal government to offer financial relief to small businesses that kept employees on the payroll throughout the COVID-19 pandemic.
Although COVID is still a public health concern, the ERC program isn’t perpetually ongoing, and there are deadlines you should be aware of as a business owner. Employers need to know how long the ERC is available to understand how much time they have to claim an ERC refund.
The ERC is a fully refundable tax credit first introduced as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. It was later extended and expanded through other legislation including the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021.
The tax credit is for quarterly payroll tax filings from 2020 and 2021 and is not available for filings from 2022. However, some businesses may be eligible to retroactively claim this credit, but deadlines to do so are coming up fast.
The ERTC is available to eligible employers for wages paid from March 13, 2020, through December 31, 2021. It is meant “for businesses that continued to pay employees while shut down due to the COVID-19 pandemic or had significant declines in gross receipts” during that time period, according to the IRS. Specifically, a recovery startup business can claim the ERC for wages paid after June 30, 2021, and before January 1, 2022.
Your business may be able to retroactively claim the ERC, but in some cases, there is less than a year left to do so. The two important ERTC deadlines for filing a claim based on your past quarterly payroll tax filings are as follows:
- For all quarters in 2020, the deadline to apply for the ERC is April 15, 2024.
- For all quarters in 2021, the deadline is April 15, 2025.
That means if you’re applying for 2020 filings, you only have until next April to get your paperwork and application in order.
Employers that have not yet claimed the ERC should consider doing so as soon as possible before there is even less time to do so. If you’re unsure of your eligibility to apply, we can help.
It’s recommended for any business owner to consult with a tax professional to determine eligibility for the Employee Retention Tax Credit, to ensure that they are claiming the credit correctly. At Dayes Law Firm, our experienced legal professionals have already helped many businesses file for millions in ERTC refunds already, with plenty of time to spare before the first of those two important deadlines.
Availability of the ERC is limited! The ERC team at Dayes can help you decide if your business should apply for the ERC before time runs out, so please don’t hesitate to contact us today for a free consultation to talk through any Employee Retention Credit questions you may have.
Our professional ERC team can discuss your options with you during a no-cost, no-obligation evaluation. Let us handle your tax credit application before it’s too late – give us a call or fill out the form on this page to learn more.