Although the Employee Retention Tax Credit, also known as the ERTC or ERC, is for wages from 2020 and 2021 tax quarters, the final deadlines to claim the credit aren’t until 2024 and 2025. However, there have been some changes to the program and some updates from the IRS you should keep in mind if you’re interested in applying and need to know more about the future of the ERTC.
What is the Future of the Employee Retention Tax Credit?
Generally, the ERTC is available to eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before January 1, 2022. However, in September 2021, the Infrastructure Investment and Jobs Act retroactively ended the Employee Retention Tax Credit, with exceptions made for Recovery Startup Businesses that were still eligible through the end of December 2021.
If you think your business qualifies to claim the ERTC, you should be aware that the two deadlines for claiming the tax credit are April 15, 2024 – for all quarters in 2020 – and April 15, 2025, for all quarters in 2021.
The program isn’t a free-for-all, though, and the Internal Revenue Service has recently made some big announcements that impact how business owners can apply for the ERTC and when they should expect their applications to be processed. For instance, the IRS announced on September 14 that a moratorium on processing new ERTC claims through at least the end of 2023 had been put in place, limiting the ability for employers to claim the credit this year.
That move came after concerns about dubious ERTC claims and businesses being scammed by dishonest third-party promoters increased in the months before September. And on that note, on December 6, the IRS announced that the agency had sent out a “round of more than 20,000 letters to taxpayers notifying them of disallowed ERC claims.”
“As we continue our audit and criminal investigation work involving the Employee Retention Credits, we continue to urge people who submitted a claim to review the rules with a trusted tax professional,” IRS Commissioner Danny Werfel said in a press release.
“If they filed an inaccurate claim, we urge them to consider withdrawing their pending claim or use the upcoming disclosure program to repay improper refunds to avoid future action.”
Long story short, while the Employee Retention Tax Credit will seemingly continue to exist through its deadlines in 2024 and 2025, it appears there will also continue to be increased scrutiny on the submitted claims. The future of the ERTC may depend on how many fraudulent claims the IRS has to deal with and whether the agency determines more changes are needed.
Work with Dayes Law Firm to Claim the ERTC
Just like IRS Commissioner Werfel suggested, we urge you to consider working with a trusted tax professional on your Employee Retention Tax Credit claim. Dayes Law Firm has a track record of success with these applications, and our team would be more than happy to assist you.
We are proud to say we have been involved in filing for more than $250 million in refunds on behalf of many businesses so far, and we help more business owners all the time. We can work with you to make sure your claim is accurate and to keep you up to date on any IRS updates that may impact your claim.
Please contact us today by calling (800) 503-2000 to find out how we can work with you to claim the ERTC for your business!