Attention business owners! If you missed out on applying for the Employee Retention Tax Credit (ERC) in 2020, time is running out. Also, the deadline to claim retroactive ERC tax credits for the second quarter of 2020 is approaching on July 31, 2023. Don’t let this opportunity slip away!
The ERC was under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in 2020. This also provides payroll tax credits to businesses forced to shut down. Or if they experienced significant revenue loss due to the pandemic.
For those who previously applied in 2020, the ERC offered a tax credit of 50% of qualified employee wages. This is up to $5,000 per employee per year. In 2021, the ERC will expand to 70% of qualified wages, up to $7,000 per employee per quarter. However, the ERC expired after the third quarter of 2021 as businesses began their recovery from the pandemic.
The first deadline for filing amended Form 941 Payroll Tax Returns is July 31, 2023, covering the second quarter of 2020. Remember, you have 30 days after the close of a quarter to file your 941. The credit between March 13 and 31, 2020, should be reported with the Q2 2020 payroll tax return.
The deadlines for filing amended returns for Q3 2020 and Q4 2020 will be October 30, 2023, and January 31, 2024, respectively.
Ensure you have the necessary documentation to be eligible for the retroactive ERC. This includes payroll data for the applicable quarters in 2020, the estimated credit amount, and evidence of a government shutdown order or a 50% or more significant reduction in gross receipts compared to the same quarter in 2019.
Considering the costs involved in filing amended returns, including accounting fees and potential tax implications, it’s also crucial to evaluate if the benefits outweigh the expenses for your company. In addition, remember that filing amended payroll tax returns for any quarter in 2020 may require you to amend your tax returns for that year.
Although it may take several months for the IRS to process refunds, smaller refunds are usually processed faster.
We’re here to assist you throughout the process. If you would like to explore the potential benefits of retroactively claiming the ERC for any quarter in 2020 or 2021, click here to apply now or request a callback by clicking here. Our team is ready to provide you with guidance and support.
We hope you learned a lot regarding retroactive ERC tax credits. Take advantage of this opportunity to secure the tax credits your business deserves. Click here to APPLY now, or by filling out the form, one of our ERC Specialists will call you back. Act now before it’s too late!