The deadline to file your taxes for 2023 is fast approaching and with it, your window to apply for a valuable tax credit for your small business may be closing. The Employee Retention Credit, or ERC, was introduced to help businesses retain employees during the COVID-19 pandemic, offering much-needed financial relief during challenging times. You can still file for this credit if you were an affected business! However, it’s essential to be aware of an important upcoming deadline to ensure you don’t miss out on this opportunity.
What is the Employee Retention Credit (ERC)?
The Employee Retention Credit is a refundable tax credit that was established as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020. It was created to encourage businesses to keep employees on their payroll, even if their ability to operate was partially or totally hindered by the pandemic. Eligible employers can claim a credit against their employment taxes for a percentage of qualified wages that were paid to their employees in 2020 and 2021 during COVID-19.
Is the ERC Ending?
The status of future ERC availability is ever-evolving as a result of legislation currently stalled in the U.S. Senate. However, if your small business was impacted by the COVID-19 pandemic, you still have time to file for the Employee Retention Credit for the 2020 tax year.
The deadline to file for the 2020 ERC is April 15, 2024. While the IRS will continue to process claims for 2021 for another year, there is a very limited time left to submit for this valuable benefit for 2020. Start the process as soon as possible! It’s crucial to make sure you submit everything correctly the first time, so talking with an ERC consultation firm that has specialized ERC knowledge is vital. Don’t miss out on your chance to claim all of the tax credits you’re entitled to and file before the April 15, 2024 deadline!
Are You Eligible for the ERC?
For your business to qualify for the Employee Retention Credit for the 2020 tax year, it must meet the following requirements:
- No more than 100 employees
- A government mandate prevented operations, either in hours or service capacity, OR revenue was less than 50% of 2019 gross receipts
You might also qualify for the ERC as a Recovery Startup Business if you meet these criteria:
- Began after February 15, 2020
- Annual gross receipts under $1 million
- One or more W2 employees
A knowledgeable tax professional can help you confirm that you meet all these requirements.
How Can You Apply for the ERC?
With the April 15, 2024 deadline for the 2020 ERC quickly approaching, it’s essential for eligible businesses to apply while they can. Missing the deadline could result in losing valuable tax credits that might help offset financial losses you incurred during the pandemic. Contact one of the former IRS Auditors at Pinnacle Minds to help you start the application process today!
Source: https://www.irs.gov/coronavirus/employee-retention-credit