The ERTC is a refundable tax credit. The ERTC is a refundable credit that companies can apply for on qualified salaries, including certain health insurance costs, paid to employees. 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. 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).
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). 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. In addition, since the beginning of the ERTC program, several laws have come into effect that affect the way in which credit can be applied for. Therefore, eligible companies that didn't initially apply for their ERTC could do so until 2024, depending on when they originally filed or paid their business taxes.
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. The ARPA, for example, allows small employers who received a Paycheck Protection Program (PPP) loan to also apply for the ERTC.
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