If your business has not yet claimed the 2021 Employee Retention Credit (ERC), you still have time—but you must act soon.
What Is the ERC, and How Much Can You Claim?
The ERC is a refundable tax credit designed to support businesses that retained employees during the COVID-19 pandemic. For the 2021 tax year, eligible businesses can claim up to $7,000 per employee per quarter for the first three quarters—a total of up to $21,000 per employee.
For example, if your business qualifies and has 10 eligible employees, you could receive up to $210,000 in refundable tax credits.
Who Qualifies?
- Significant decline in gross receipts: Your business experienced at least a 20 percent decline in gross receipts compared to the same quarter in 2019.
- Full or partial suspension of operations: Your business faced a federal, state, or local government-ordered suspension of operations due to COVID-19 restrictions.
- New businesses (recovery start-up businesses): If you started your business after February 15, 2020, you may qualify for a credit of up to $100,000.
Why You Must Act Now
The ERC is claimed by filing an amended payroll tax return (Form 941-X) for the relevant quarters. The deadline to file your 2021 ERC claims is April 15, 2025—and this date is fast approaching.
Many businesses have overlooked or misunderstood the ERC, assuming they do not qualify or it's too late to apply. Even if you received a Paycheck Protection Program (PPP) loan, you may still be eligible for the ERC if you don't use the same wages for both programs.
Time Is Running Out
If you are eligible for the 2021 ERC, you could have substantial money on the table. The IRS deadline to file amended payroll returns is April 15, 2025, and we strongly recommend beginning the process as soon as possible.