As the deadline approaches, businesses have a unique opportunity to claim the Employee Retention
Credit (ERC), a tax credit designed to help companies retain employees during the economic downturn
caused by the global health crisis. However, time is of the essence, with the final date to amend returns
for this credit set for April 15, 2025. Here’s what you need to know about this last chance for ERC and
how you can take advantage of it:
Understanding the ERC
The ERC was introduced as part of the CARES Act to provide relief to businesses affected by the
economic impacts of the health crisis. It allows eligible employers to claim a refundable tax credit
against certain employment taxes paid with respect to employees. Initially, the credit was for 50% of
qualified wages up to $10,000 per employee for 2020, and it was later expanded for 2021 to 70% of
qualified wages up to $10,000 per quarter, per employee.
Why Amend Your Returns
Many businesses might have missed out on this credit due to confusion over eligibility, changes in
legislation, or simply not being aware of the opportunity. Amending your returns to claim the ERC can
result in significant tax refunds or credits, providing much-needed financial relief or capital for business
growth.
The Deadline
The IRS has set April 15, 2025, as the last day to file amended returns for the ERC for the years 2021.
This deadline is firm, and missing it means forfeiting the chance to claim this credit.
How to Amend Your Returns
Amending tax returns can be complex, especially when dealing with credits like the ERC. Here’s where
professional help becomes invaluable:
Documentation: You’ll need to gather all relevant documentation, including payroll records, proof
of government orders affecting your business, and any other evidence of economic hardship.
Eligibility: Ensure your business meets the criteria for the ERC, which includes experiencing a
significant decline in gross receipts or being subject to a full or partial suspension of operations due to
government orders.
