The employee retention tax credit is overlooked by many organizations that might be eligible to take advantage of the credit.
The ERC applies for 2020 and 2021 and there is a three-year window to file an amended return. Since this credit applies to quarterly activities and ends up being amended 941 or the quarterly tax return, clients have three years from the date they filed that return to file an amended return with the ERC component included in that.
Some businesses mistakenly believe that because they didn’t qualify for the PPP, they also don’t qualify for ERC. It’s important to remind clients that these are two separate programs with their own set of requirements, and not qualifying for one does not disqualify you from another.
A businesses that had an increase in revenue during the pandemic should also still investigate the ERC credit. While companies in all industries should look into this credit, those in the restaurant industry are particularly well-suited.
“Just a few months ago, the IRS would tell you that 80% of the of small businesses and not-for-profits were eligible for this credit, and there probably was only 30 to 40% that actually claimed it,” he said. “You can see there’s this big group of folks that just were not clear on whether they qualified.”
Click on this link to complete a short survey that will help you determine if your company is eligible for ERC.