When is the Employee Retention Credit Deadline? ERC Tax Credit Guide

By Justine D.

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Since the beginning of the Employee Retention Credit, many have wondered when the deadline would be. Since 2020, the deadline has changed due to new legislation and guidance supplied by the IRS, leading to many business owners needing clarification while figuring out how to apply and obtain the refund credit.

Besides this, there have even been some recent cases of companies claiming to offer ERC assistance and claiming that filing must be completed before it is too late. This has led to a lot more confusion and a false sense of urgency.

In order to have an understanding of the ERC credit deadline, there are some misunderstandings that need to be explained first.

In November 2022, the Infrastructure Investment and Jobs Act was signed, making many believe it would end the need for Employee Retention Credit. However, the ERC was only given a retroactive end date. It was at this time that many began to misunderstand the deadline for the ERC.

To clear this misunderstanding, it is important to know that the ERC tax credit works the same way other taxes work and follow the same amendments regarding time limits and deadlines, three years from the previous year’s qualifying tax filing deadline.

How To Spot False Claims

You need to know that the deadline for claiming the ERC will vary among the different processors. This knowledge can be easily found by researching online and finding others talking about it.

With the deadline changing constantly, one thing that hasn’t changed is the fact that a filer has three years to claim from the tax year that they qualify for. So when a claim is made for the 2020 tax year, they can take until 2023 to file a claim.

A proposed deadline that many thought would happen was for March 2023, a deadline precisely three years from the start of the ERC.

Others believed the deadline to apply for the Employee Retention Credit was three years from the qualifying tax year. However, this is also an erroneous deadline.

The Actual ERTC Deadline from the IRS

With a lot of erroneous information surrounding the ERTC filing deadline, the IRS has clarified when the official deadline is, and you will be happy to know that you still have time to file.

For each year of the ERC, filing is closed once a year. For all 2020 quarters, the ERC deadline is on April 15, 2024. For all 2021 quarters, the ERC deadline is on April 15, 2025.

As you can see, the deadline date for filing the ERC is the same as for filing income tax. This makes the entire filing system easier and allows for consistent processing.

Although you have plenty of time to file, if you want to obtain your ERC quickly, it is best to file it sooner than later because they are processed in order. 

Recap of What ERC Is

If you are new to the whole ERC thing or still need clarification, the Employee Retention Credit is a credit based on payroll taxes. This credit provides a maximum amount of $26,000 for each employee retained during the pandemic. Many businesses feel confused about it all, so they have yet to make a claim. If you are one of those businesses, you must act now by filing for your qualifying ERC before the 2024 and 2025 deadlines hit.

How to Qualify?

For a business to qualify, some requirements must be met.

1. Amount of Employees

To be eligible for the 2020 tax year, the number of employees working full-time must be below 100 during 2019. For 2021 eligibility, the number of employees working full-time must be below 500 during 2019.

2. Direct Impact Occurred

If an impact on the business occurred directly, it was due in one of two ways. First, an order was given by the government that affected your business revenue directly for either 2020 or 2021.

The other way of impact was due to governmental orders causing an effect on the business operations. This impact caused the operations to be suspended either partly or entirely, experienced issues in the supply chain, or implemented social distancing, among others.

Time to Claim Is Still Available

Clarifying the deadline is excellent if your business has been confused about the entire ERC program or the deadline has already passed. Companies who have yet to file can find out if they qualify so that they can get their share from the ERC.

By getting a hold of a reputable financial services provider, they will help keep your business running by filing for your ERC refund.

Many of the financial services that offer ERC filing can provide loan amounts equal to your ERC amount. These loans are a great way to obtain your cash fast with little time to wait. Once received, you can use the funds for quick reinvestment into your company without much to pay upfront.

With time on your side, you should file immediately. The reason is due to the amount of time needed for filing and ensuring that all required documentation is obtained beforehand.

To have a claim for ERC built, it may require months of preparation, which could be due to the qualification method and how long it takes to gather the necessary paperwork. As soon as your claim is filed, processing will take at least six months. Once processed, you can expect to see the refund at least nine months later.

When you start today, your wait will be much less than if you filed later. This way, the ERC can get to work and help bring some normalcy back to your business. Plus, the ERC provides an excellent way to recoup lost revenue that was experienced throughout the pandemic.

By knowing that you have an entire year to file your 941-X form, you now have a better understanding of the eligibility, options for funding, and when the official deadlines are for filing.

Choosing a Trusted Firm to Assist with Application

There are hundreds of ERC providers in the country but not all of them are created equal. You need a legitimate company focused solely on ERC, who have hundreds of great reviews, have processed thousands of applications successfully, and have great customer service. 

We always suggest you do your own research when selecting a firm, but our team spent hundreds of hours researching all of the ERC providers and we wanted to give you a starting point so you are not too overwhelmed. 

We narrowed down a list of hundred to the top 7 firms who provide legit services and meet the qualifications above. Learn more about the top 7 here

Below is a summary of the only three firms that received at least a 4 out of 5 star rating. ERC Specialists, Omega Accounting, and ERC Today. Each one of these firms are qualified and equipped to assist in your application. Here are some of the key features of each. Thanks for reading. 

Please Note: ERC specialists uses a back office partner firm called LINQQS. When you click the link to start an ERC evaluation, you will see a LINQQS qualification form.

#1

4.6 of 5 stars

  • Fast application
  • No-cost analysis
  • Discount options
#2

4.3 of 5 stars

  • 4.6/5 BBB Rating
  • Secure application
  • Bridge loans available
#3
#3
#3

4.1 of 5 stars

  • 4.6/5 Trust Pilot Rating
  • Competitive Rates
  • Transparent Fees

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