There’s still time to claim the Employee Retention Credit

June 6th, 2023

•2 minute read

Written by: Jonathan Hitter, CPA, MST, CGMA

Are you looking to take advantage of the employee retention credit (ERC)? You’re likely bombarded with ads and solicitations urging you to act now. But before you move forward with the ERC application process, it’s important to understand what the ERC is and what it entails. It’s also important to consider aggressive marketing and misleading claims; the IRS added Employer Retention Credit Promoters to its annual ‘Dirty Dozen’ list of top taxpayer scams for the year. Keep reading for some key points to consider.

1. You still have time.

Despite being specifically for 2020 and 2021 payroll tax filings, there is still a chance you may be eligible to claim this credit. If you file before the ERC claim deadline, you may be eligible to receive this credit for your business. Here are the filing deadlines for ERC claims:

• For the 2020 tax year, you must file your ERC claim by April 15, 2024.
• For the 2021 tax year, your deadline is April 15, 2025.

2. Beware of Misleading Advertising Regarding Employee Retention Credit

The Employee Retention Credit is a legitimate tax credit but beware of misleading advertising from aggressive promoters that make unrealistically high promises. The IRS and tax professionals have noticed a surge in exaggerated claims and misinformation about the credit. Don’t fall for false promises – seek out accurate and trustworthy information from reliable sources to determine if you qualify for this credit.

3. Work with a reputable advisor to answer your ERC questions.

Not every business will qualify for this tax credit. Seek the guidance of a qualified advisor who can assess your unique needs, goals, and eligibility for the ERC refund. Failure to meet the requirements may result in penalties and interest payments. It is worth noting that not all businesses are eligible for the ERC tax credit.

Remember that the IRS has a statute of limitations for assessment, typically three years from the deemed filing date. This means ERC claims for all 2020 quarterly tax filings can be audited through April 15, 2024, and claims for the first two quarters of 2021 can be audited through April 15, 2025.

If you’re like many businesses and need help understanding the ERC and the recent changes, contact our team of qualified professionals for help! We look forward to helping you!