When is the deadline to claim the ERC?

March 29th, 2023

You've undoubtedly seen an ERC ad or two over the last few weeks. Their frequency seems to be increasing. They're finding their way onto the radio, snail mail, and even the CFP National Championship game. Much of the advertising states that the deadline to file your ERC claim is fast approaching and money is running out. As the Washington Post Fact Check team might say: those claims deserve 4 Pinocchios. Here are the facts:

Fact 1 - The ERC is not about to expire. The deadline is April 15, 2024 for the 2020 ERC and April 15, 2025 for the 2021 ERC.

Many ERC providers mistakenly think that the deadline to claim the ERC is this year since, in general, taxpayers have 3 years to amend their returns to claim tax credits. However, employment tax returns - i.e., Form 941, on which you claim the ERC - are treated as filed on April 15 of the year following the year the quarterly return was due. Therefore, the deadlines are actually April 15, 2024, and April 15, 2025.

Fact 2 - ERC funding is not about to run out.

Unlike the Paycheck Protection Program (PPP), which was almost immediately oversubscribed, ERC funding is unlimited. Whereas the PPP had a specific funding allocation, there is no cap on the amount of ERC refunds issued by the IRS - ERC funding is available up until the deadline. Filing a claim for the ERC will not reduce the amount of money available to other businesses. In fact, the Congressional Budget Office initially estimated that the ERC would cost the Federal Government $84 billion. However, per a 2022 GAO study, only about half of that amount had been claimed.

Don't feel pressured to get your claim filed immediately. If you decide to use a consultant, take time to make an educated decision about your consultant, understand their eligibility and calculation methodology, and review their deliverables. You still have time to make sure what gets filed is accurate.

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