Employee Retention Credits (ERC) and Other Potential Tax Credit Opportunities

Several members have successfully claimed Employee Retention Credits (ERC) or additional ERC  — even when they thought they had claimed everything available or were told they weren't eligible.

• 2021 ERC opportunity still available
  • 2021 ERC claims may be submitted until April 15, 2025. Many businesses attempted to file before January 31, 2024, due to pending legislation that would have ended the program early, but that legislation failed to pass the Senate. Therefore, the 2025 deadline to file 2021 ERC claims remains intact.
  • The 2021 ERC may be up to $21k/employee—$7k/quarter for each of Q1, Q2, and Q3. (Q4 is available if you are a recovery startup business (RSB) meaning you started your business on or after February 15, 2020 and have an annual income of less than $1M.)
  • You may be an eligible employer in 2021 if any of the following apply:
    • Your quarterly gross receipts declined >20% when comparing any of the below quarters:
      • Q1 2021 v. Q1 2019 (or Q4 2020 v. Q4 2019)
      • Q2 2021 v. Q2 2019
      • Q3 2021 v. Q3 2019
    • Your operations were partially suspended due to government orders; OR
    • You are an RSB (see above)
• ERC processing status
  • The IRS has a moratorium for processing ERC claims filed after September 14, 2023, but claims may still be submitted and will eventually be processed.
  • The IRS will resume processing pre-moratorium ERC claims later this summer on a first-in-first-out basis. The IRS has a large backlog of ERC claims to process, so it may take awhile to receive an update on your claim. Be on the lookout for any correspondence from the IRS — it will likely come via regular mail. It may be a check or it may be an inquiry asking for more information. It will be critical to respond right away.
  • If you'd like a more detailed update on the ERC, watch the free on-demand webcast from CPAacademy.org, "Employee Retention Credits: Risk, IRS Intent, and Claim Recovery Strategies."
• Beyond the ERC
  • If any of the following apply, you may be eligible for a federal income tax credit or, in some cases, your state may also offer additional credits:
    • You hire individuals facing barriers to employment (e.g., long-term unemployed, SNAP/TANF recipients, certain veterans, etc.)
    • You employ individuals living and working in Federal Empowerment Zones
    • You provide paid leave for FMLA reasons over (e.g., paid maternity/paternity leave)
    • You provide child care for your employees
    • You employ individuals receiving tips for food/beverage service
    • You establish a new retirement plan and employ fewer than 100 employees
    • You establish a new health plan and employ fewer than 25 full-time employees

Please reach out to Mike Brinton at [email protected] if you have questions about an ERC claim or want information on any of the other credits. An initial consultation is free of charge. If you'd like to pursue an opportunity after the initial consultation, fee structures (e.g., percentage fee, fixed fee, etc.) will depend on the specific opportunity.