ERC 2023 Deadline Update: Clearing Confusion and Maximizing Your Tax Credit Refunds | MTRS
Discover the truth about the Employee Retention Credit (ERC) deadline and how to claim your tax credit refunds. Get expert guidance from MTRS to make the most of this opportunity. Act now and schedule a free consultation.
ERC 2023 Deadline Update: Clearing Confusion and Maximizing Your Tax Credit Refunds
For hardworking small businesses, the ERC is already an excellent opportunity to recover some of the money lost during the pandemic. By understanding your eligibility, deadline, and advanced funding options, you can make the most of the credit and obtain the financial assistance you need now.
Since the Employee Retention Credit was first introduced in 2020, its deadline has been a moving target. Because of IRS guidance and newer legislation, the ERC deadline has been moved several times, resulting in confusion for businesses seeking to take advantage of the credit. Recent advertisements by questionable ERC companies have created a sense of urgency regarding the deadline to apply for ERC, which has only contributed to greater confusion among the public.
Employee Retention Credit Deadline Confusion
The Infrastructure Investment and Jobs Act of November 2022 retroactively ended the ERC program on September 30, 2021. In some cases, this is when the understanding of the ERC deadline begins to disintegrate.
It is important to note, however, that the deadline to claim Employee Retention Credits follows the same timeline as that for amending taxes. Businesses have three years from the end of the tax year to submit their claim.
Errors in ERC Filing Deadlines
Various ERC processors provide different deadlines for filing ERC applications. One or more of these may have been seen in your own research or experience.
One of the most frequently repeated deadlines is the ‘rolling deadline’. In this case, businesses will be able to file their payroll tax amendments for up to three years from each quarterly deadline, resulting in a separate filing date for each quarter. Suppose, for example, that your company claimed losses for the quarter ending in Q220, it would be possible for you to file until the quarter ending in Q223 and so on.
The program was also proposed to be terminated on March 12, 2023, which would be three years after the program was initially initiated on March 12, 2020.
Another ERC deadline that is often mentioned is three years after the date of tax filing.
Which is the Real Deadline for Applying for the Employee Retention Credit?
We have received clarification from the IRS, and there is still time to claim your ERC tax credit refund.
Each year’s filing window for the ERC closes only once: for all quarters in 2020, the deadline is April 15, 2024, and for all quarters in 2021, the deadline is April 15, 2025.
In this way, your ERC filing (form 941-X) is conveniently tied to your business’ regular income tax filing deadline.
In spite of the fact that there is still ample time to file for ERC, the IRS generally processes claims in the order in which they are received, so the sooner you file for ERC, the sooner you will receive your refund.
What is the ERC again?
In case you need a refresher, the Employee Retention Credit (ERC) is a payroll tax credit that allows qualifying businesses to receive up to $26,000 per employee. During the COVID-19 pandemic, Congress passed a credit intended to assist small businesses in keeping their staff on payroll. Because of misconceptions and changes in ERC requirements, many businesses have not claimed ERC benefits. Nevertheless, business owners may still be able to claim ERC refunds by amending their payroll taxes before the 2024 and 2025 filing deadlines.
How Does ERC Apply to My Business?
To qualify for the ERC, your business must meet certain requirements:
- Number of employees: Your company must have fewer than 100 full-time employees to be eligible for the 2020 ERC. For the 2021 ERC, the threshold is fewer than 500 full-time employees in 2019.
- Impact on the business: Your business must have experienced a significant decline in quarterly revenue (gross receipts) for the 2020 or 2021 quarter compared to the same quarter in 2019 due to a government order.
Additionally, government orders must have negatively affected your overall business operations, such as the suspension or partial suspension of operations, social distancing or capacity requirements, supply chain issues, reduction of operation hours, employee training, and more.
It’s Not Too Late to Claim Your ERC
The clarification of the ERC deadline is beneficial for companies that were unsure about filing or concerned about missing the deadline. In some cases, your company may still qualify for an ERC refund worth thousands or even millions.
Act Now and Claim Your ERC Before the Deadline
While there is still time to claim your refund before the ERC deadlines approach, it’s crucial not to wait until the last minute. Applying for ERC credits can be a time-consuming process. A successful ERC claim may take months to build, depending on your qualification route and the timely submission of essential documents. The IRS typically takes up to six months to process tax amendments and up to nine months to deliver refund checks once the amendment is submitted.
By getting started today, you’ll be able to receive your money sooner.
For hardworking small businesses, the ERC is an excellent opportunity to recover some of the money lost during the pandemic. With almost another year to go, you still have time to file your amended tax form 941-X. By understanding your eligibility, deadline, and advanced funding options, you can make the most of the credit and obtain the financial assistance you need when you need it.
To learn more about the ERC or to speak with an ERC specialist, contact MTRSNow, the leading experts in maximizing tax credit refunds. MTRS’s team is dedicated to helping businesses like yours navigate the ERC process and ensure you receive the benefits you deserve. Don’t miss out on this opportunity — schedule a free consultation with MTRSNow.
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