To start the ERC credit, employers must file Form 941, the employer's quarterly federal tax return. The employee retention credit is a fully refundable tax credit for employers that is equivalent to 50 percent of qualified wages (including allocable qualified health plan expenses) that eligible employers pay to their employees. To be eligible for the ERC, the employee must complete a quarterly payroll tax return form (Form 94) to monetize the credit for each payroll period. The employee retention credit is equivalent to 50 percent of the qualifying wages (including qualifying health plan expenses) that an eligible employer pays in a calendar quarter.
Eligible employers will report their total qualifying wages and related health insurance costs for each quarter on their employment tax returns (generally, Form 941, Employer's Quarterly Federal Tax Return) for the applicable period. In addition, companies that have 100 or fewer full-time employees may be eligible to receive a 100 percent wage credit for employees. They can say that amendments can be submitted up to three years after the filing date of each quarterly payroll tax, resulting in a different deadline for applying for the ERC for each calendar quarter. The ERC can only be filed using IRS Form 941-X, “Adjusted Federal Tax Return or Employer Refund Request.” Some tax advisors are misstating the rules related to the deadlines for employee retention credit (ERC) applications.
While the above-mentioned deadline for receiving the ERC was last October, companies can submit an application retroactively by filling out a refund request form, also known as the employer's adjusted quarterly federal tax return (941-X).
