The Employee Retention Credit, also known as the ERC Tax Credit, was established under the CARES Act to incentivize businesses to keep employees on payroll during the 2020 and 2021 tax year. Eligible businesses can submit applications to the IRS that show qualified wages they paid to employees while their business experienced hardship from government-regulated COVID-19 lockdowns and restrictions.
The ERC tax credit is a huge benefit for eligible businesses, who can earn up to $7,000 per calendar quarter per employee that they paid qualified wages to. This could seriously help businesses recoup financial loss they experienced during the pandemic. But, make sure you apply right away if you qualify. The ERC tax credit is not an immediate approval and may take more time than you think.
When Is the Deadline for the ERC Tax Credit?
There is still plenty of time for your business to apply for the ERC tax credit. For the 2020 tax year, the deadline is April 15, 2024. For the 2021 tax year, the deadline is April 15, 2025. You have until the specified deadline to amend your tax return for that year and apply for ERC. However, it’s best not to wait until the deadline to apply.
Why Is My ERC Approval Taking So Long?
Waiting for approval from the IRS can be stressful for many businesses. There are plenty of businesses applying for the ERC tax credit that are heavily relying on the tax credit to provide them with some financial relief. Decreases in revenue during the pandemic led many businesses to scramble for ways to recover from the loss.
The IRS received more applications for the ERC tax credit than anticipated. With only a small team of ERC experts approving applications at the IRS, the process for approval has proved to be slow. Making sure that you apply efficiently and with all the correct information that the IRS will need can improve your wait time.
Is There Anything I Can Do to Receive It Faster?
Yes! There are some ways that you can get in line faster with the IRS for your ERC application. That way, all you are waiting on is their approval. Hiring an ERC consultant is the best way to speed up the pace of your application. By filling out and submitting the application yourself, you risk providing incorrect information that could lead to a rejection, IRS audit, or questions from the IRS about your application. You can avoid all of this and complete your application faster by consulting with an ERC specialist who has had experience with these types of applications.
Aside from providing accurate information, an ERC consultant is usually a certified tax attorney or tax accountant. They have had plenty of experience navigating the IRS. With them by your side, you can get in line with the IRS faster while avoiding the pitfalls of hiring an inexperienced ERC scammer that could hurt your chances of approval.
Photo by Nataliya Vaitkevich:
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