The good news for qualified employers looking to benefit from ERTC is that it's even easier to qualify. The ERTC was designed to encourage companies of all sizes to keep employees on their payroll during this difficult economic period. Employers cannot apply to the same employee for the ERTC credit and the work opportunity tax credit during the same period, nor can they claim the same salary under the ERTC and the employer credit in section 45S for the Family and Medical Leave Act (FMLA). Consequently, if previously salaries were wrongly classified as qualified wages for the ERTC, then amendments to 941 would be necessary to correct any unintentional errors.
While ERTC eligibility has been expanded, determining eligibility can be difficult for employers, even before considering the data and documentation related to employees, hours and salaries needed to calculate the credits for which they may be eligible. Since then, the ERTC has been expanded twice so that more struggling companies can use it to lower their federal tax bill. While the Employee Retention Tax Credit (ERTC) program has officially expired, this does not affect a company's ability to apply for the ERTC retroactively. A financial professional can also help you ensure that you don't apply for the same payroll for both PPP and ERTC loan forgiveness.
In addition, most of the notice reiterates the ERTC FAQs that were previously posted on the IRS website. The government introduced several programs and policies as a form of relief, including the Employee Retention Tax Credit (ERTC). The ERTC is a refundable credit that companies can apply for on qualified salaries, including certain health insurance costs, paid to employees. However, if your company did apply for a PPP loan, you cannot apply for the ERTC for the same salary counted for PPP forgiveness.
Companies that wish to apply for the ERTC must report their total qualified salaries, as well as related health insurance costs, on their quarterly tax returns (Form 941 for most employers).