Time is Running Out: The 2023 Deadlines for Claiming the Employee Retention Credit

Jun 16, 2023 | Affiliates, Business Insurance


As we enter 2023, we must know the upcoming deadlines for claiming the Employee Retention Credit (ERC). The ERC has been a lifeline for businesses impacted by the COVID-19 pandemic. They offer financial relief through a refundable tax credit. This blog post will guide you through claiming the ERC in 2023. This includes deadlines, eligibility criteria, calculation methods, filing procedures, and tracking options. Understanding these crucial details will ensure you can successfully claim the credit before the deadline. Also, you can secure the credit your business needs to help retain your employees.

Understanding the Employee Retention Credit

The Employee Retention Credit was part of the CARES Act, a comprehensive economic stimulus bill passed in March 2020. Its primary objective is to provide relief to American workers and business owners. The ERC is a refundable payroll tax credit to help employers cover the costs of retaining employees during challenging times. It was initially extended through various legislative measures, including the Taxpayer Certainty and Disaster Tax Relief Act of 2020.

Filing Deadlines for ERC in 2023

Although the ERC expired in September 2021, eligible businesses can still file for retroactive claims in 2023. To do so, you need to file IRS Form 941-X. This allows corrections to be made to the initially filed Form 941. This can be done within three years from the original filing of your payroll tax returns. Notably, 941-Xs for eligible quarters in 2020 must be submitted to the Internal Revenue Service by April 15, 2024. Similarly, the deadline for claiming ERC funds for eligible quarters in 2021 is April 15, 2025.

Eligibility Requirements for the Employee Retention Credit

 To qualify for the ERC, businesses must meet specific criteria. The two main eligibility requirements are:

  1. Significant Decline in Revenue. Businesses must demonstrate a significant decline in gross receipts or total revenue compared to the same quarter of 2019. The decline thresholds vary, with a 50% reduction for quarters in 2020 and an 80% reduction for quarters in 2021.
  2. Partial or Full Suspension of Business. Businesses that experienced partial or complete suspension due to government-mandated orders are also eligible. This includes restrictions on working, travel, commerce, and meetings. Recovery startup businesses operating a trade or business after February 15, 2020, are also eligible for the credit.

Calculating the Employee Retention Credit

Calculating the ERC requires a detailed understanding of the guidelines. It involves determining the decline in gross receipts for the eligible quarters in 2020 and 2021 and comparing them to the corresponding quarters in 2019. If the decline thresholds are met, businesses can claim the credit based on qualified wages paid during those quarters.

Filing for the ERC in 2023

To claim the ERC, eligible employers must ensure they meet the IRS qualifications and file Form 941-X to claim the credit retroactively. You can do this up to three years after filing the original tax forms. Amending previously submitted forms allows businesses to correct errors and claim the credit they are eligible for.

Tracking Your ERC in 2023

Tracking your ERC filing can be challenging, especially considering the high volume of inquiries to the IRS. To simplify the process and save time, consider seeking the assistance of tax professionals who offer services to track your filing status and communicate with the IRS on your behalf. This dedicated customer service ensures you stay informed about the progress of your filing.

Conclusion and Next Steps

Claiming the Employee Retention Credit (ERC) is a critical step for small businesses seeking relief during the pandemic. To maximize the benefits of this credit, it is crucial to understand the deadlines, eligibility criteria, calculation methods, and filing procedures. While the process can be complex, assistance is available to ensure accurate and timely claims.

If you need further guidance on the ERC or require assistance in claiming it for 2023, we recommend contacting our team of experienced ERC Specialists. Our experts possess in-depth knowledge of the ERC and can address any queries. By consulting with our professionals, you can ensure a seamless filing process and make sure you claim the credit correctly before the deadline.

Please schedule a consultation with one of our experts today to take the next step toward claiming your Employee Retention Credit. We are committed to providing you with the support and expertise necessary to navigate the ERC successfully and obtain the financial assistance your business deserves. Apply now by clicking here or filling out the contact form and one of our ERC Specialists will reach out and help you get on the path to claiming the Employee Retention Credit.

We hope you have learned about the Employee Retention Credit (ERC) deadlines for 2023. Don’t forget to contact us if you have any queries!

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