Can I File a Tax Extension to Claim the ERTC? 

December 11, 2023
Dayes Law Firm

If you have yet to file your Employee Retention Tax Credit (ERTC) claim, you’re not too late. The deadlines for filing the 2020 and 2021 credit applications are April 15, 2024, and April 15, 2025, respectively. 

However, you must undergo a specific ERTC tax extension process to file for these credits retroactively. Learn how to amend your tax returns and claim the ERTC below. 

Tax Extension vs. Amendment 

First, understand the difference between a tax extension and an amendment of your tax returns. 

A tax extension pushes back the deadline to file your initial tax returns. You can request an extension of up to six months. The IRS offers extensions on a case-by-case basis, so you shouldn’t assume that an extension will apply to you without specifically requesting one. 

In contrast, the IRS allows you to amend tax returns you have previously submitted for up to three years after the initial deadline. You’ll need to use a special form, Form 941-X, to amend any tax returns. 

Form 941-X allows you to correct information that you previously entered inaccurately on your federal tax returns or change other pieces of your initial tax returns. When filing for the ERTC, you must submit amended tax returns for the quarters you’re eligible for these payroll tax credits. The six-month extension period has already passed. 

Filing Amended Tax Returns for the ERTC

The ERTC tax extension process requires you to file Form 941-X for each quarter in 2020 and 2021 in which you qualify for the ERTC. You can follow this process to file your retroactive claims for the ERTC. 

1. Download Form 941-X From the IRS Website

The IRS has downloadable versions of all tax forms on its website. Download Form 941-X and print it off or edit the PDF on your device. Keep in mind that you’ll need to submit this form by mail, so you may prefer to print it up front. 

You can also download the IRS’s instructions for filling out Form 941-X. 

2. Fill Out the Required Sections 

Once you’ve downloaded Form 941-X, fill out the first page with the following information:

  • Input your employer identification number and identifying information.
  • In the “Return You’re Correcting” box, check “941.”
  • Check the quarter you are amending. 
  • Fill out parts one and two. 

In part three, you will likely only need to fill out box 18a, the “nonrefundable portion of employee retention credit.” You can use the 941-X worksheet to calculate your credit. 

Then, fill out all applicable sections on page three. 

On page five, you must indicate that you are amending your return to apply for the ERTC. Then, sign the form on the bottom of page five.  

3. Fill Out Form 1040-X to Amend Income Tax Returns 

When you claim the ERTC, you must amend your income tax returns for those same quarters. Receiving credits toward your tax liability for qualified wages reduces any deductions you can take for employee wages by that same amount. 

Fill out Form 1040-X to amend your income tax returns for all quarters for which you’re filing the ERTC. 

Contact Dayes Law Firm for ERTC Assistance 

If the above steps seem overwhelming, you’re not alone. Many businesses work with tax professionals to streamline the ERTC tax extension process and ensure the accuracy of their amended returns. Because of the ever-growing IRS backlog, you should file your returns as soon as possible to speed up your tax credit. 

Our tax attorneys at Dayes Law Firm can file your amended tax returns on your behalf and answer any questions you might have about qualification. Give us a call at (800) 503-2000 or fill out our online form to schedule your free consultation.