*IIJA retroactively amends section 3134 to limit availability in the fourth quarter of 2021 to a recovery startup business. Infrastructure Investment and Jobs Act (IIJA) The ERC has been amended three separate times after it was originally enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March of 2020 by the Taxpayer Certainty and Disaster Relief Act of 2020 (Relief Act), the American Rescue Plan (ARPA) Act of 2021, and the Infrastructure Investment and Jobs Act (IIJA).

Notice 2021-49, Guidance on the Employee Retention Credit under Section 3134 of the Code and Miscellaneous Issues Related to the Employee Retention Credit, Section IV.C PDF.įor more information, see Correcting Employment Taxes.

Notice 2021-20, Guidance on the Employee Retention Credit under Section 2301 of the Coronavirus Aid, Relief, and Economic Security Act, question 60 PDF.

For additional information, please refer to the following resources: Reminder: If you filed Form 941-X to claim the Employee Retention Credit, you must reduce your deduction for wages by the amount of the credit, and you may need to amend your income tax return (e.g., Forms 1040, 1065, 1120, etc.) to reflect that reduced deduction. For example, if an employer files a Form 941, the employer still has time to file an adjusted return within the time set forth under the 'Is There a Deadline for Filing Form 941-X?' section in Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund. Eligible employers may still claim the ERC for prior quarters by filing an applicable adjusted employment tax return within the deadline set forth in the corresponding form instructions. A recovery startup business can still claim the ERC for wages paid after June 30, 2021, and before January 1, 2022. With the exception of a recovery startup business, most taxpayers became ineligible to claim the ERC for wages paid after September 30, 2021.

For example, businesses that file quarterly employment tax returns can file Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund PDF, to claim the credit for prior 20 quarters. The federal government established the Employee Retention Credit (ERC) to provide a refundable employment tax credit to help businesses with the cost of keeping staff employed.Įligible businesses that experienced a decline in gross receipts or were closed due to government order and didn't claim the credit when they filed their original return can take advantage by filing adjusted employment tax returns.

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