Is the ERTC a Loan for Businesses?

July 20, 2023
Dayes Law Firm

The Employee Retention Tax Credit, also referred to as the ERTC or ERC, has been around for a few years, but many business owners who could take advantage of it may still not fully understand how it works. Some employers may not even know whether the ERTC is a loan for businesses, or how to even apply for it. A trusted tax professional like the ones at Dayes Law Firm can answer all of your questions about the ERTC – before the first deadline to claim the credit arrives.

Claiming the ERTC

The Employee Retention Credit is a tax credit meant to financially assist businesses that maintained staff during the height of the COVID-19 pandemic. If your business experienced significant setbacks during certain fiscal periods of 2020 and 2021, but you continued to retain W2 employees on staff, you may qualify for this credit and could even receive up to $26,000 per employee!

The ERTC is available to employers that experienced either a full or partial shutdown of operations due to governmental orders related to COVID-19, or if a business experienced a decline in gross receipts in 2020 or 2021 when compared to the same quarter in 2019.

To claim the Employee Retention Tax Credit, you can file an amended Form 941X (Quarterly Federal Payroll Tax Return) for past quarters in which your business was an eligible employer. But there are a lot of elements that determine how you apply for the credit, including determining eligible wages, the number of employees that can be factored in, and more, and turning to a team with a lot of experience helping businesses apply for the ERTC could be in the best interests of your business. 

Is the ERTC a Loan?

One of the main questions business owners may have about the ERTC is whether or not it needs to be paid back. 

The Employee Retention Tax Credit is a fully refundable tax credit. It is available for many employers to claim against certain employment taxes. But perhaps most importantly, the ERTC is not a loan and does not need to be paid back to the federal government. 

While a deductible decreases a business’s taxable income, a tax credit lowers the amount of tax owed to the IRS. Your business still has time to retroactively claim the ERTC for 2020 or 2021 and potentially get credited back money your business is entitled to through the program. 

But the ERTC does have deadlines, and one of them is coming up fast. For all quarters in 2020, the deadline to apply for the Employee Retention Tax Credit is April 15, 2024. For all quarters in 2021, the deadline is April 15, 2025.

Dayes Law Firm ERTC Team

Our team can potentially help you and your business claim the ERTC and reward you for keeping employees on staff during extremely unstable financial periods in 2020 and 2021 resulting from the COVID-19 pandemic. 

The Dayes Law Firm ERTC team can help you determine whether you qualify to apply for the Employee Retention Tax Credit and help you claim the credit. Remember – it’s not a loan, and does not need to be repaid!

Please contact us for a free consultation concerning any of your ERTC questions. Dayes Law Firm and our partners have been involved in filing for more than $250 million in refunds for many companies already, and we would be happy to work out how we can assist you, too. 

Feel free to fill out the form on this page or call 1-866-684-8114 to learn more in a free, no-obligation evaluation. Get in touch to see how Dayes can help you and your business retroactively claim the ERTC funds your business is eligible to receive. These funds do not need to be paid back. Give us a call today!