The ERC expired in 2021 but the benefits extend through 2024
If your startup or small business lost revenue because of COVID-19, you may still qualify for the Employee Retention Tax Credit (or ERC), one of the largest tax credits available to business owners under the CARES Act.
Nearly 70% of small and medium businesses qualify for the ERC due to loss of revenue or because their business (or supplier) was impacted by a government mandate.
The signing of the Infrastructure Invest and Jobs Act last November effectively ended the credit for fourth-quarter wages in 2021. However, the IRS states that “employers may still claim the credit for prior quarters by filing an applicable adjusted employment tax return”, also known as the 941-X Amended Quarterly Payroll Tax return.
The IRS will accept this amended return up to three years after the initial filing, extending the timeline to participate in the ERC program through the end of 2024.
Both essential and non-essential business owners can qualify There is no cap on the number of employees that are paid in each quarterly period You can apply even if you took out a PPP loan Qualifying claims may include all four quarters of 2020 and the first three quarters of 2021 (ending September 30)
How do you calculate the employee retention credit?
You can claim up to $5,000 in refundable tax credits for each employee on their payroll in 2020 and up to a $7,000 credit per quarter for each employee in 2021 (excluding Q4).
For the first three quarters of 2021, the maximum credit available to eligible employers is $21,000 per employee ($7,000 x 3 quarters).
Ready to take the next step to see if you are eligible to claim? Talk to Rebate today about your potential ERC refund for qualifying quarters in both 2020 and 2021. Let’s get your business back on track.