Many business owners have already applied for the Employee Retention Credit, though there is still time to do so if your business is eligible and you still haven’t applied for the ERC. It offers a bit of a financial boon to businesses that kept employees on the payroll during the economic uncertainty of the COVID-19 pandemic, and with the effects of the pandemic still having an impact, there are questions about whether or not the ERC will be extended to 2023.
ERC Qualifying Quarters
The ERC is a refundable tax credit businesses can claim for qualified wages paid to their employees during certain time periods.
The Employee Retention Tax Credit (ERC/ERTC) was first available for wages paid from March 13, 2020, to December 31, 2020, and was later extended. The Consolidated Appropriations Act, 2021 (CAA) extended the ERC to include wages paid before July 1, 2021, and The American Rescue Plan Act of 2021 (ARPA) later also extended the coverage period to incorporate wages paid between July 1, 2021, and December 31, 2021.
End of the ERC
However, the Infrastructure Investment and Jobs Act retroactively ended the Employee Retention Tax Credit as of September 30, 2021, with exceptions made for recovery startup businesses that were still eligible through December 2021.
But was that truly the end of the ERC? Far from it. In fact, there is still time to apply for the ERC, although deadlines are looming. If you haven’t already researched whether or not your business is eligible, it may be time to do so or consult with tax professionals to check on your ERC eligibility.
Will the ERC Be Extended?
There are no current plans to extend the ERC or to start a new program like it. But you can still retroactively apply for qualifying quarters in 2020 and 2021. If your business had a substantial decline in gross receipts during particular quarters in those years and you did not already claim the credit, you may be eligible to apply for the ERC.
For 2020, quarters two, three, and four qualify to be considered for ERC application purposes.
By comparison, when it comes to 2021, quarters one, two, and three qualify, and recovery startup businesses may qualify for the last quarter of 2021.
If you did not claim the Employee Retention Credit for the years 2020 and 2021 previously, you might be able to do so for your business now, or you can seek the assistance of an ERC team to complete your application as soon as possible.
ERC Deadlines
There are two deadlines to consider when claiming the ERC in 2023 and beyond. For all quarters in 2020, the deadline to apply for the ERC is April 15, 2024. For all quarters in 2021, the deadline is April 15, 2025.
So although the ERC isn’t technically going to be extended, there is still a window of time to apply retroactively for the tax credit.
How Dayes Law Firm Can Help
The team at Dayes Law Firm and our partners can offer you assistance with the Employee Retention Tax Credit if you haven’t already applied.
Please contact us for a free, no-obligation consultation regarding any of your ERC questions. We have extensive experience in Employee Retention Credit matters, and we are proud to say we have been involved in filing for more than $250 million in refunds on behalf of many businesses to date!
We would be honored to help you get the funds for your business that you’re entitled to! Fill out the form on this page or give us a call to learn more today.