Wednesday, Dec 06, 2023

2023 Deadline for Claiming Your Employee Retention Credit

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2023 Deadline for Claiming Your Employee Retention Credit

The Employee Retention Credit (ERC) deadline is crucial to know. Discover when you need to act to claim this valuable tax credit in our informative guide.


Many businesses encountered a decline in revenue because of the COVID-19 outbreak yet retained their employees. To assist small and medium-sized enterprises, the government introduced Employee Retention Credits aimed at aiding their survival. Were you unable to take advantage of this opportunity for reimbursement? Continue reading to discover more.

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Employee Retention Credit Explained

During the height of the COVID-19 pandemic in the United States, when businesses were forced to close to protect citizens, employers faced uncertainty regarding how to support their employees. Some compassionate individuals chose to keep paying their staff, aiming to help them make ends meet, hoping the shutdown would be short-lived. However, certain companies continued to grapple with challenges well into 2021.

To support small and medium-sized businesses during economic slowdowns, the government introduced the Employee Retention Credit (ERC). This credit enabled business owners to seek reimbursement for payroll expenses incurred from 2020 through late in the following year, providing crucial financial relief during these uncertain times. Understanding ERC deadlines and eligibility criteria became essential for businesses seeking to benefit from this relief program.

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What Are the Eligibility Requirements for ERC?

In order to be eligible for the Employee Retention Credit, your company needs to have encountered at least one of the criteria listed below:

  • Because of a government mandate in your state, your business had to shut down either fully or partially. This directive was a direct response to the COVID-19 outbreak
  • Your company experienced a definite decrease in total revenue

The regulations imposed by the government regarding "a decrease in total income" differed between the years 2020 and 2021.

For businesses in 2020 to be eligible, they had to experience a minimum of a 50% decline in total income when compared to the corresponding period in 2019. Only companies with a maximum of 100 full-time employees were permitted to apply.

In contrast, for businesses in 2021, they only needed to show a reduction of at least 20% in their total income. The government extended eligibility to organizations with up to 500 full-time employees.

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What Is the Deadline for the Employee Retention Credit?

Although the Employee Retention Credit (ERC) program has officially concluded, there remains an opportunity for your business to seek financial assistance. It’s crucial to stay informed about the ERC deadlines, including the ERC filing deadline.

All modifications to your 2020 filing must be finalized by April 15, 2024. Likewise, any adjustments to your 2021 payroll tax forms must be submitted no later than April 15, 2025.

How to Apply for Employee Retention Credit

The Employee Retention Credit (ERC) tax credit deadline is tied to payroll taxes from 2020 and 2021. To secure reimbursement through this program, you must take action by filing an amendment to your payroll forms.

The IRS has introduced Form 941-X exclusively for this task. A separate form must be submitted for each quarter in which you seek funds.

For the year 2020, only one form is required. Yet, for those meeting the eligibility criteria, it's essential to remember that you'll need to file a distinct Form 941-X for each of the initial three quarters of 2021, ensuring compliance with the ERC deadlines to access the benefits of this program.

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Bottom Line on What Is the Deadline for the Employee Retention Credit

Even though the Employee Retention Credit program has already ended, there’s still an opportunity for your business to apply for a refund. To submit your application, you must complete Form 941-X for each quarter you’re requesting credit from. The IRS is processing these forms as efficiently as possible, but it can take anywhere between six months and a year for businesses to receive their refund.

If you want to expedite the process, an ERC filing service may be your best option. Companies like ERC Specialists specialize in guiding businesses through the complex application process and ensuring that your form reaches the IRS more quickly. 

This service also reduces the likelihood of errors that could lead to payment delays or no payment.

>> Visit ERC Specialists for Speedy ERC Filing! >>