Is it Too Late to Get the Employee Retention Credit?

The ever-evolving changes in employee retention credit legislation have left many business owners wondering if they can still take advantage of the program. To file a retroactive return, you must file an adjusted quarterly federal tax return from the employer or a request for reimbursement, on Form 941-X. On July 6, Elizabeth Milito, senior executive advisor to the NFIB Small Business Legal Center, and Holly Wade, executive director of the NFIB Research Center, hosted a webinar on how to apply for the Employee Retention Tax Credit (ERTC), also known as ERC. The ERTC aimed to encourage employee retention by offering employers a quarterly credit for each qualified employee.

By now, most companies have heard of or even applied for employee retention tax credits (ERTC) or a PPP loan. You can do this by filing an adjusted quarterly federal tax return from the employer or a request for reimbursement, Form 941-X. An employer calculates its credit using salaries subject to social security taxes and the amounts paid by the employer to provide a group health plan. If the employee count exceeds 100, the credit is limited to eligible costs paid to employees who were fired or weren't working for the company for some other reason.

This means that, until the end of 2024, eligible employers will be able to continue taking advantage of the employee retention credit with applicable labor taxes and qualified wages paid to their employees until December 31. In addition, if business operations were fully or partially suspended due to the inability to obtain critical goods or materials from suppliers, the employer may be eligible to receive the credit. We can answer your questions and help you with the Employer Withholding Tax Credit, the CARES Act, tax consulting and filing options. Employers still have time to apply for a payroll tax refund by applying for the Employee Retention Tax Credit (ERTC). If a reduction in payroll tax deposits doesn't cover the credit, the employer can receive an advance payment from the IRS.

If you didn't apply for the employee retention tax credit, you may be able to apply for it retroactively. Companies with more than 100 employees qualify if they pay salaries to employees when they are not providing services due to COVID-19. The ERTC was created under the CARES Act to offer refundable credit to certain employers who continued to pay workers during the pandemic. The ERTC is fully refundable even if the payroll taxes paid by the employer during that quarter are lower than the credit.