Advocacy News – April 6, 2023
In March 2020, to help businesses mitigate the devastating effects of COVID-19, the federal government introduced the Employee Retention Tax Credit (ERTC). The ERTC was specifically created to help businesses that were impacted by revenue reductions in hopes of incentivizing employers to keep their employees, rather than resorting to layoffs.
At the time of the ERTC’s introduction, businesses had to make a decision between applying for the ERTC or the Paycheck Protection Program, commonly referred to as the “PPP Loan.” However, federal funding for the ERTC has been expanded multiple times since 2020, as the effects of COVID-19 have lasted, and continued to negatively impact businesses, far past the height of the pandemic. Subsequently, because of these expansions more businesses that may have taken advantage of the PPP Loan may now also be eligible for the ERTC.
According to the U.S. Chamber of Commerce, the following businesses are eligible to apply:
- Your business was ordered by a local government to fully or partially shut down in 2020 or 2021.
- Your gross receipts for a single quarter of 2020 fell by 50% versus the same quarter of 2019 (for the 2020 tax credit).
- Your gross receipts for a single quarter of 2021 decreased by 20% versus the same quarter of 2019 (for the 2021 tax credit).
But the time to act is now as Tax Day is almost here. “Eligible employers can claim the ERTC retroactively by filing Form 941-X for each quarter they paid qualifying wages. They can file this form up to three years after the original payroll taxes are due. This means that employers can claim the 2020 ERTC until April 15, 2024, and the 2021 ERTC until April 15, 2025.”
To see how to apply and additional details on eligibility, click here.
For additional questions or more information, please contact Leah Robinson at lrobinson@michamber.com.