{"id":3346,"date":"2022-08-22T04:47:31","date_gmt":"2022-08-22T04:47:31","guid":{"rendered":"https:\/\/oandgaccounting.com\/staging\/?p=3346"},"modified":"2023-02-23T12:50:08","modified_gmt":"2023-02-23T12:50:08","slug":"theres-still-time-to-claim-the-2020-2021employee-retention-credit-erc","status":"publish","type":"post","link":"https:\/\/oandgaccounting.com\/staging\/theres-still-time-to-claim-the-2020-2021employee-retention-credit-erc\/","title":{"rendered":"There\u2019s Still Time To claim the 2020 & 2021 Employee Retention Credit (ERC)"},"content":{"rendered":"
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The Employee Retention Credit (ERC) continues to provide opportunities for businesses and employers to lower their income tax liabilities, allowing companies to save thousands or even millions of dollars to bolster their working capital, embark on improvements including renovations, technology and staffing, business acquisitions, paying off existing loans etc.<\/p>\n

Although the Employee Retention Credit (ERC) provisions expired at the end of 2021, the credit can be claimed retroactively on an un-filed or amended payroll tax returns as long as the statute of limitations remains open. <\/p>\n

Generally, form 941-X<\/a> must be filed by the later of: 3 years from the date you filed your original return, or 2 years from the date you paid the tax. <\/p>\n

The CARES Act provides for an employee retention credit<\/a> for eligible employers, including tax-exempt organizations<\/a>, that pay qualified wages<\/a>, including certain health plan expenses<\/a>, to some or all employees during calendar year 2020 and 2021<\/p>\n

For 2020, the Employee Retention Credit (ERC) is a tax credit against certain payroll taxes, including an employer\u2019s share of social security taxes for wages paid between March 12, 2020 through December 31, 2020. The tax credit is 50% of the wages paid up to $10,000 per employee, capped at $5,000 per employee<\/p>\n

For 2021, the employee retention credit (ERC) is a quarterly tax credit against the employer\u2019s share of certain payroll taxes. The tax credit is 70% of the first $10,000 in wages per employee for the first (1st<\/strong>), second (2nd<\/strong>) and third (3rd<\/strong>) calendar quarters of 2021. That means the credit is worth up to $7,000 per quarter and up to $21,000 per year, for each employee. <\/p>\n

Due to the termination of the employee retention credit for wages paid in the fourth (4th<\/strong>) calendar quarter of 2021, employers that are not recovery startup businesses are not entitled to the employee retention credit for wages paid on or after fourth (4th<\/strong>) calendar quarter of 2021.<\/p>\n

A recovery startup business is eligible for the employee retention credit for qualified wages paid in the third (3rd<\/strong>) and fourth (4th<\/strong>) calendar quarters of 2021.In the case of an eligible employer that is a recovery startup business, the amount of the credit allowed for each of the third and fourth calendar quarters of 2021 cannot exceed $50,000.<\/p>\n

An eligible employer may file a claim for refund or make an interest-free adjustment by filing Form 941-X, Adjusted Employer\u2019s Quarterly Federal Tax Return or Claim for Refund, for a past calendar quarter to claim the employee retention credit to which it was entitled on qualified wages paid in that past calendar quarter. <\/p>\n

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