How Do Extensions and Exceptions Work for ERTC Deadlines?

January 16, 2024
Dayes Law Firm

The Employee Retention Tax Credit (ERTC) is available to certain businesses that experienced a significant decline in gross receipts in 2020 and 2021 due to COVID-19. As a result, many businesses assume that the deadline to file this credit has long passed. In reality, you still have time to claim the ERTC retroactively with ERTC deadline extensions.

What Quarters in 2020 and 2021 Can You Claim the ERTC? 

The ERTC is a quarterly tax credit, which means you can claim it for each quarter you are eligible. 

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the credit was originally available for the second, third and fourth quarters in 2020. However, the Coronavirus Response and Consolidated Appropriations Act extended this credit into 2021 as well. 

Your business can claim the ERTC for three quarters in 2020 and the first three quarters in 2021, as long as you experienced a significant decline in gross receipts during each quarter. Recovery Startup Businesses can also claim the credit in Q4 of 2021.

Deadline to File the ERTC Retroactively 

Due to ERTC deadline extensions, you still have time to file this tax credit. You can amend your tax returns for 2020 and 2021 to claim the ERTC for all eligible quarters.

The deadline to file the amendment for your 2020 tax returns is April 15, 2024. The deadline to file for 2021 tax returns is April 15, 2025. 

The IRS allows amendments for up to three years from the date the original tax return was due. With the help of a tax professional, you can still claim the ERTC and gain up to $28,000 per employee in tax credits. 

The deadlines above are strict cutoffs for the ERTC. Don’t wait; speak with a tax professional today about using these ERTC deadline extensions to your advantage. 

How To File the ERTC Retroactively With Form 941-X

If you haven’t yet filed the ERTC, you can still do so; just file Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return. The purpose of this form is to correct errors on your Form 941, including a failure to claim tax credits. 

You will need to fill out this form for each quarter you are eligible for the ERTC. In Part 3, line 18a, you will fill out the non refundable portion of the employee retention credit (ERC). You’ll need to indicate the:

  • Total corrected amount for all employees
  • Amount originally reported or as previously corrected for all employees
  • Difference between these two figures
  • Tax correction

After claiming the ERTC, you will also need to amend your wage deductions on your business tax returns. Claiming the ERTC reduces the amount of employee wages you can deduct from your tax liability. 

Form 1040-X allows you to amend your federal income tax return. A tax professional can help you understand how much your wage deductions will change with the ERTC. This step is important, as failing to update Form 1040 could leave you with tax penalties that cut into your ERTC money. 

Dayes Law Firm: Your ERTC Tax Attorneys 

Failing to file your ERTC application could cause your business to miss out on tens of thousands of dollars. Thankfully, due to ERTC deadline extensions, you can still claim this credit by the deadlines. If you’re not sure where to begin, the knowledgeable tax attorneys at Dayes Law Firm can assist you. 

Our ERTC team would be happy to determine your ERTC eligibility for each quarter and file the application on your behalf using Form 941-X. Then, we’ll help you amend your federal income tax return accordingly. Give Dayes Law Firm a call at (800) 503-2000 to request more information and a free consultation