Employee Retention Tax Credit Deadline – Businesses Have to up 3 Years to Amend a Previous Filed 941

The Employee Retention Tax Credit will be phased down for most firms on September 30, 2021, because of the passage of the Infrastructure Investment and Jobs Act. The IRS also issued instructions on how to terminate the program retroactively. Businesses have to up 3 years to amend a previous filed 941

The Employee Retention Tax Credit program‘s termination date was retrospectively altered to September 30, 2021, with the Infrastructure Investment and Jobs Act signing on November 15, 2021. Recovery Startup Businesses can still claim the credit if they pay qualified wages until December 31, 2021.

Employers who got an early ERTC payment or lowered their employment tax deposits in anticipation of the credit for the fourth quarter of 2021 received guidance from the IRS on December 6 in Notice 2021-65. This caution was needed after the law’s signing made some employers ineligible for ERTC in the fourth quarter due to the program’s retroactive termination.

Since the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted in April 2020, this is the third law passed.

The employee retention credit has been extended and enlarged numerous times under the American Rescue Plan Act and previously under the Consolidated Appropriations Act, 2021, modifying the ERTC program’s termination date several times.

This page covers everything from eligibility to eligible wages to how the credits operate. It is also distinguished by law and date since different conditions apply based on whether you obtained a Paycheck Protection Program (PPP) loan and when you claim the credit.

Who qualifies for the employee retention tax credit? Employers are eligible if their gross receipts are less than 80% (versus less than 50%) in comparison to the same quarter in 2019. If your gross receipts decline by more than 20% in 2021, you will be eligible for the credit.

What is the Employee Retention Credit?

The ERTC is a refundable credit that businesses can claim on qualified wages paid to employees, including certain health insurance costs.

CARES Act – 2020

For employers who qualify, including borrowers who took a loan under the initial PPP, the credit can be claimed against 50 percent of qualified wages paid, up to $10,000 per employee annually for wages paid between March 13 and December 31, 2020.

Consolidated Appropriations Act – 2021

Employers who qualify, including PPP recipients, can claim a credit against 70% of qualified wages paid. Additionally, the amount of wages that qualify for the credit is now $10,000 per employee per quarter for the first two quarters of 2021.

@USTreasury and #IRS issue guidance on delaying tax payments due to the #COVID19 outbreak. If you don’t have a tax balance due, file as quickly as possible to get your refund. See: https://t.co/hEEWmgHA9V pic.twitter.com/sxDI2de1fA

— IRSnews (@IRSnews) March 19, 2020

American Rescue Plan Act – 2021

The credit remains at 70% of qualified wages up to a $10,000 limit per quarter, so a maximum of $7,000 per employee per quarter. So, an employer could claim $7,000 per quarter per employee or up to $21,000 for 2021 after the passage of the Infrastructure Investment, and Jobs Act changed the program’s end date for most businesses to September 30, 2021. However, Recovery Startup Businesses are still eligible for ERTC through the end of the year. A Recovery Startup Business started after February 15, 2020, and, in general, had an average of $1 million or less in gross receipts. They could be eligible to take a credit of up to $50,000 for the third and fourth quarters of 2021.

VeriFlipp announces that under the updated CARES Act, businesses have 3 years to amend a previous filed 941 to apply for ERC Credit. Your business may be eligible for an Employee Retention Tax Credit of up to $26,000 per employee if it has been affected by the COVID 19 pandemic. This is not a loan; it’s money you can spend however you wish. The ERTC program is available to businesses that accept a Paycheck Protection Program (PPP) loan. Take advantage of this fantastic opportunity.