The Employee Retention Credit (ERC), sometimes called the Employee Retention Tax Credit or ERTC, is a refundable tax credit for certain eligible businesses and tax-exempt organizations.
The Employee Retention Credit (ERC) has been a lifeline for businesses and organizations during the COVID-19 pandemic. With specific requirements based on decreased revenue or government shutdown, this refundable tax credit has provided invaluable support for those who continued to pay their employees at critical times.
Qualifying tax-exempt businesses and organizations have been those closed by government orders due to the pandemic or those that experienced the required decrease in gross receipts during certain periods in 2020 and 2021. Eligible employers must have paid qualifying wages to qualify. to credit.
Claiming the ERC involves filing an amended tax return for those employers who did not originally do so on their payroll tax return. It is essential to note that by claiming this credit, your wage deduction may be reduced, possibly requiring additional amendments to your income tax returns.
It is crucial to remember the deadlines: until April 15, 2024 for the 2020 tax periods and until April 15, 2025 for the 2021 tax periods.
Eligibility and steps to claim this credit may vary depending on the type of employer. Therefore, understanding the specific requirements and seeking professional advice are essential steps in taking advantage of this valuable resource.
Who can sign an ERC refund claim?
Who can sign an ERC claim depends on the type of employer you are.
|
Employer type |
Who can sign an ERC refund claim if you filed an original employment tax return? |
|
Single owner |
The individual who owns the business. |
|
Corporation, including a limited liability company (LLC) treated as a corporation |
The president, vice president or other principal officer duly authorized to sign |
|
Partnership (including an LLC treated as a partnership) or unincorporated organization |
A responsible and duly authorized member, partner or officer who has knowledge of its affairs. |
|
Single-member LLC treated as a disregarded entity for federal income tax purposes |
The owner of the LLC or a principal officer duly authorized to sign |
|
Trust or estate |
the trustee |
In summary, the ERC has been an essential tool for many businesses during challenging times, and understanding its operation and requirements can make a big difference in a business's ability to recover and remain strong amid economic adversity.
The Employee Retention Credit (ERC), sometimes called the Employee Retention Tax Credit or ERTC, is a refundable tax credit f...