The deadline for eligible businesses to apply for the ERTC is with their quarterly Form 941 tax returns, which are due on July 31, October. Generally speaking, people who are self-employed cannot take advantage of the ERTC when it comes to their own self-employment income. Based on government shutdown criteria, a company may qualify for the ERTC with a full or partial shutdown. It's important to note that employers who received a PPP loan and those who receive second-draw PPP loans may also be eligible for the ERTC.
The ERTC has been designed to encourage companies of all sizes to keep employees on their payroll during this difficult economic period. Depending on the size of your company and the amount of qualified salaries paid during the quarter, the ERTC may still be substantial. The early termination of the ERTC means that companies must pay withheld payroll taxes to monetize the anticipated credit, advised Marvin A. For example, if your company has flexibility in the PPP forgiveness period, first determine the quarters in which you may have qualified for the payroll credit can be useful for taking full advantage of both ERTC and PPP.
While the definition of a qualified wage is limited for large employers, you can still take advantage of the ERTC by paying employees who weren't working or who had reduced hours. The ERTC was originally included in the Coronavirus Aid, Relief and Economic Security Act (CARES), but was not widely used because, initially, companies could only take advantage of the Paycheck Protection Program (PPP) or the ERTC. However, some self-employed people may qualify for the ERTC if they employ other workers in their trade or business. From stores and restaurants to medical services and fitness centers, you may qualify for the ERTC if you meet one or more of the following criteria.
While you can't make a double fall with the same salaries for PPP and ERTC loan forgiveness, you can optimize your applications for both. Eligible companies, Smith said, can file a retroactive ERTC refund request on qualified wages previously paid during the past calendar quarters by filing Form 941-X, the employer's adjusted quarterly federal tax return, or the request for reimbursement. The Internal Revenue Service can also issue further guidance on the ERTC, so contact the IRS if you have any questions. Business tax filers will need additional payroll data and other documents to file their quarterly returns with the ERTC.
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