When Does the Employee Retention Tax Credit End? 

 November 14, 2023

By  Jace W Campbell, CPA

When Does the Employee Retention Tax Credit End

The Employee Retention Tax Credit (ERTC) is a relief program initiated by the US government… It was designed to help businesses keep employees on their payroll during the pandemic-induced economic downturn. At its core, ERTC offers a fully refundable tax credit for employers equal to 70 percent of qualified wages that they have paid to their employees.

To qualify for this credit, businesses must meet certain criteria. The eligibility requirements for the ERTC are both complex and constantly changing… For instance, it applies primarily to businesses that experienced a significant decline in gross receipts or were subject to forced closure due to government orders.

How does one qualify for the ERTC?

Eligibility for the ERTC is determined on a quarter-by-quarter basis… It’s primarily intended for companies that either had their operations partially or fully suspended due to governmental COVID-19 related orders, or experienced a significant decline in gross receipts compared with 2019 levels.

The definition of ‘significant decline’ changes depending on when you are looking at it… For instance, in 2020, a ‘significant decline’ meant gross receipts were less than 50% of the same quarter in 2019. However, from July 1, 2021 onward, this threshold has been lowered to only requiring gross receipts be less than 80% of the same quarter in 2019.

Navigating these requirements can be complex and potentially overwhelming… It’s recommended to seek professional advice from reputable sources such as JWC ERTC Advisory CPA who can help ensure you’re making accurate claims and maximizing your benefits.

Also read: Employee Retention Credit 2020 vs 2021

Decoding Lies and Deceptions

Sadly, there are firms out there using deceptive tactics to entice you into signing up with them… They may promise maximum credits without assessing your individual circumstances. Such dishonest practices not only risk your company’s reputation but also open you up to potential legal repercussions.

This is where JWC ERTC Advisory CPA comes in… We provide comprehensive and ethical ERTC advisory services. With us, you’re not just another number. We take the time to understand your unique circumstances and apply our expertise to maximize your benefits within the framework of the law.

When Does the Employee Retention Credit End?

According to IRS.gov, the Employee Retention Credit (ERTC) is set to end on December 31, 2021… This particular deadline, however, could potentially be extended if external conditions necessitate such a move. As such, it’s crucial for businesses to stay abreast of any developments by consulting reliable and authoritative sources such as IRS.gov and Treasury.gov.

As we delve into this further, it’s worth noting that ERTC covers certain health benefits expenses… But it does not include severance pay. This distinction can significantly impact your eligibility and the amount you can claim under this program.

Also read: Employee Retention Credit Deadline 2023

Can You Still Claim the Employee Retention Tax Credit?

The answer is a resounding yes. Businesses have until April 2024 to claim credits for the year 2020 and until April 2025 to claim credits for the tax year 2021. However, bear in mind that this timeline is subject to change by Congress.

For instance, Congress had previously passed legislation ending this program early… This took place back in November 2021 when they prematurely terminated the program for the fourth quarter of that year while passing the Infrastructure Act. Given this precedent, it’s prudent for businesses to prepare for possible similar actions in the future.

Who Benefits from the Employer Retention Tax Credit?

The primary beneficiaries of ERTC are employers who have managed to retain their employees during these trying times… Especially those who’ve faced significant financial challenges due to government-imposed lockdowns or a substantial drop in gross receipts due to COVID-19 restrictions.

What Are Four Mistakes To Avoid With The Employee Protection Tax Credit?

One common mistake is misunderstanding eligibility requirements... Some firms may assert that any business impacted by the pandemic qualifies for ERTC. While it’s true that pandemic-related impact forms part of qualifying factors, being affected by itself doesn’t automatically make a business eligible.

There are other conditions that need to be met… Including experiencing a substantial decline in gross receipts or being subject to government-ordered shutdowns. Misinterpreting these requirements can lead to incorrect filings and potentially serious repercussions.

In essence, it’s crucial for businesses to understand the ins and outs of ERTC… The better your understanding, the more likely you are to optimize your benefits while staying compliant with all regulations.

ERTC: A Tool Against Unprecedented Challenges

While it’s clear that ERTC is a valuable tool for businesses grappling with unprecedented challenges, it’s equally crucial to approach it ethically… The IRS has recently intensified its crackdown on ERC promoters suspected of fraudulent activities.

JWC ERTC Advisory CPA stands out in this regard. Our approach balances maximizing your benefits while ensuring compliance with regulations. We can even review previous ERTC claims for those who are unsure or skeptical about their eligibility.

Also read: How is Employee Retention Credit Reported on Tax Returns?

In conclusion

Navigating through these challenging times calls for more than just survival… It calls for ethical conduct, accurate decision-making and strategic planning. Engaging JWC ERTC Advisory CPA can offer much-needed peace of mind by offering expert advice and handling the intricacies of ERTC compliance on your behalf.

Jace W Campbell, CPA

Jace founded JWC ERTC Advisory CPA in March 2021 as the nation's first and only public accounting firm focused solely on ERC . . . and nothing else. He has personally signed over 9,000 ERTC claims and is proud to be executing these claims conservatively, and how intended by Congress.

He has a passion for educating clients so they can make the best decision for themselves.  If you read articles and watch videos that Jace produced in 2021, his approach is the same now as it was then.

While other firms pivot their messaging to comply with new IRS guidance, Jace continues preaching the same conservative principles that have helped clients recover hundreds of millions . . . while sleeping easy at night.

related posts:

Can You Claim Employee Retention Credit in 2023?

Can You Claim the Employee Retention Credit in 2022?

Employee Retention Credit Scams: What You Need to Know

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