JThe tax credit for the job retention credit is no longer available for United States companies that want to pay wages to claim it, but that’s not all.
Businesses have until 2024 and in some cases until 2025 to reverse their payrolls during the pandemic and retroactively claim the credit by filing an amended tax return.
The ERTC program is officially finished but it will take another two to three years before it is no longer used in one way or another.
Is the ERC tax credit still available?
For most businesses, the credit could be claimed on wages until September 30, 2021, with some businesses having until December 31, 2021 to pay qualified wages.
Companies have until April 15, 2024 to file amended returns for the second, third and fourth quarters of 2020, and until April 15, 2025 to file amended returns for all quarters of 2021.
The ERTC was a refundable credit that was introduced to allow businesses to claim qualified wages, including certain health insurance costs paid to employees.
There is guidance on the Inland Revenue Service website Notice No. 2021-20 on how businesses can claim the credit retroactively.
Who is eligible?
Most employers, including colleges, universities, hospitals, and 501(c) organizations following the enactment of the American Rescue Plan Act, could qualify for the credit.
There are two main eligibility factors for employers and one of these factors must apply in the calendar quarter in which the employer wishes to use the credit.
These are: “A business or business that has been totally or partially suspended or had to reduce its opening hours due to a government order. The credit applies only to the part of the quarter during which activity is suspended, not to the entire quarter.
The other is: “An employer that has a significant decline in gross receipts.”