How to Meet ERTC Deadlines and Streamline the Process

August 24, 2023
Dayes Law Firm

The COVID-19 pandemic shuttered thousands of businesses nationwide and cost many more millions in lost revenue. If that sounds familiar, you might be eligible to claim the Employee Retention Tax Credit (ERTC). Also called the Employee Retention Credit (ERC), this refundable payroll tax credit rewards employers who kept paying their workers during the pandemic.

Here’s how to streamline the ERTC process so your business can claim this credit before it’s too late.

Don’t Wait To Claim the Credit

As all good things do, the ERC program will soon come to an end. You can still nab the credit if you haven’t yet, but don’t rest on your laurels. If you make a mistake on your application and need to fix it, you risk passing the deadline.

If you want the credit for 2020, you have until April 15, 2024, to apply. The deadline for the 2021 credit is 2025 (same month and day).

Understand Whether You Qualify for the Credit

Does your business qualify for the ERTC? The requirements are pretty strict, and not all businesses can meet them. To qualify, your business must have either:

  • Had a big drop in gross receipts (at least 50% for 2020 or at least 20% for 2021)
  • Temporarily shut down, either partially or fully

For instance, if you own a bar and couldn’t serve customers indoors, that would count as a partial shutdown. If you’re a daycare owner and had to cut the number of kids you could accept, that also counts as a partial shutdown.

Apply for the ERTC

You can streamline the ERTC process by completing your application correctly. Here’s how:

  1. Tally up the wages you paid to employees in 2020 and 2021. This includes money paid to employees (whether they were working for you or not), plus health insurance costs your business paid for them. You can claim up to $5,000 per employee for 2020 and up to $21,000 per worker for 2021.
  2. Complete Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund. Be sure to enter wages in the correct boxes and explain the corrections you’ve made at the bottom of the form.
  3. File Form 941-X by sending it to the IRS. Don’t bother trying to send it in online because the IRS won’t let you. You’re stuck sending your application via snail mail (don’t forget the stamp).

Wait for Your Credit

Once you’ve sent your application, you must play the waiting game. It could take about eight weeks for your credit to show up, but if you’re unlucky, you might end up waiting for a few months or even up to a year.

Sadly, there’s not a whole lot you can do to speed things up. The IRS simply doesn’t have enough manpower to go through your application right away. They’ll likely be even busier as the deadline approaches and hundreds of other businesses scramble to send their applications on time.

If you’re wondering what’s going on with your refund, you can call the IRS at (800) 829-1954. Don’t be surprised if you have to leave a message, though. The IRS says it might take up to two weeks for someone to call you back.

Dayes Law Firm Can Help You Streamline the ERTC Process

The ERTC can help keep your business steady in tough times, but the application process can be downright confusing if you’re not a tax wizard. If you need a little help making sense of the credit, reach out to Dayes Law Firm at (800) 503-2000. We’ll explain eligibility, tell you whether you qualify, and offer tips for applying.