The Employee Retention Tax Credit (ERTC) program has officially expired, but this does not prevent businesses from applying for the ERTC retroactively. To apply for credit for previous quarters, employers must file Form 941-X, Employer's Adjusted Quarterly Federal Tax Return or Request for Refund, for the applicable quarters in which qualifying wages were paid. The IRS will review the application and decide if the business is eligible for the credit. The employee retention credit under the CARES Act encourages companies to keep employees on their payroll.
Eligible employers, including PPP beneficiaries, can apply for a credit against 70% of qualified wages paid. Employers with 100 or fewer full-time employees can use all the salaries of employees who work, as well as any paid time that they are not working, with the exception of paid vacation provided under the Families First Coronavirus Response Act. Employers who use a Professional Employers Organization (PEO) or a Certified Professional Employer Organization (CPEO) do not file an individual 941 on their behalf, so it's important that they understand how they would reconcile this information and receive credit. In addition to the employee retention credit services offered by the company, Aprio works with other credits to increase the company's liquidity. ERC Assistant is an employee retention credit service that offers a simplified process for onboarding customers and filing claims in as little as one to two weeks.
This means that employees will not have to pay any additional taxes on the salaries covered by the ERC. For companies that have experienced a significant decline in their gross revenues or that have closed due to COVID-19, all salaries paid to employees are considered qualified salaries. The ERTC serves as a lifesaver to help companies, eligible employers and their employees survive the waves of unexpected events that have gripped them in recent years. For example, there are paid vacation tax credits that have been extended and are available until the end of September. Leave under the FFCRA included paid sick leave and family leave, which, when taken under the provisions of the law, offered businesses the opportunity to apply for a tax credit. You can find updates on the employee retention credit, frequently asked questions about tax credits for the required paid leave, and other information on the IRS coronavirus page.