Initially, it may have taken four to six weeks for you to receive your employee retention tax credit reward. However, due to the backlog of applications filed with the IRS, this has dragged on for several months. Most employers can expect to receive their refund from the ERTC within six months to a year after filing their return. This is just one example of how to process an employee retention credit application with a little knowledge and experience.
As companies across the country continue to deal with the consequences of the COVID-19 pandemic, many are taking advantage of the employee retention tax credit (ERTC). As outbreaks and pandemics become more frequent, the employee retention tax credit and similar programs, such as the Check Protection Program (PPP), are likely to play an even greater role in helping companies keep their workers employed. Many companies have been forced to lay off employees or reduce their working hours and, as a result, the employee retention tax credit has become an increasingly important tool for companies. Quick background: If you haven't explored the employee retention credit (ERC), you may be eligible for a payroll tax credit that has resulted in significant refunds.
The employee retention credit is refundable, meaning that companies can receive a refund if they have already paid their taxes for the year. This will ensure that the prepayment of the credits received by the common law employer is properly reconciled with the employment tax return filed by the third payer for the calendar quarter in which the advance payment of the credits is received. In addition, credit has also been expanded in recent months to cover a wider range of companies and employees. Employer F can file a Form 7200 to request a credit or refund of this amount before the end of the quarter (but not for any amount of the employee retention credit that has already been used to reduce the deposit obligation).
The credit for each eligible employer will be the amount of the credit distributed among the members of the aggregate group based on each member's proportional share of the qualifying salaries that give rise to the credit. We can help you calculate credits, file 941-X to apply for employee retention credits, review pre-calculated credits, determine requirements for credits, assist with IRS audits to 941-X, and help you with letters from the IRS to help resolve delays in your credits. The IRS website has a page dedicated to the employee retention credit, and the page includes a link to a specific phone number for questions about the credit. In these circumstances, the third payer files a payroll tax return (such as Form 94) for the wages he paid to employees with his name and the EIN, and the common-law employer files a payroll tax return for the wages he paid directly to employees under his own name and EIN.
The credit is designed to encourage companies to keep employees on the payroll during periods of economic hardship. Fortunately, we have some answers to put your mind at ease and help you check the status of your employee retention tax credit.