Employee Retention Credits

In This Section

*Update 9/20/23*
IRS Issues ERTC Moratorium, Eligibility Checklist, and FAQ

The Internal Revenue Service (IRS) has announced a moratorium on processing new claims for the Employee Retention Tax Credit (ERTC) and is instituting stricter compliance reviews amid wide concern regarding predatory activity by fraudulent third-party entities filing claims. The announcement specifies that, “payouts for [existing] claims will continue during the moratorium period but at a slower pace due to the detailed compliance reviews.” Meanwhile, the IRS has issued an updated ERTC eligibility checklist and ERTC Frequently Asked Questions.

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The Employee Retention Tax Credits (ERTC) created under the CARES Act are refundable payroll tax credits accessible to nonprofit organizations. The 2020 credit was applied to 50% of qualified wages, up to $10,000 in wages/year, and PPP recipients were previously ineligible to access the ERTC. The 2020 ERTC later became retroactively available to 2020 PPP recipients for certain wages not covered by PPP forgivable loans. 

The 2021 credit is valued at 70% of qualified wages, up to $10,000 in wages/quarter per employee for the entire 2021 calendar year, amounting to up to $28,000 in refundable payroll tax credits per employee. Employers that receive Paycheck Protection Program loans or Shuttered Venue Operators Grants in 2021 will qualify for the expanded ERTC for wages that are not also covered by a forgivable PPP loan or an SVOG grant.

• Under current guidelines, the deadline for eligible employers who satisfy all the requirements for claiming the ERTC with respect to any applicable period between March 13, 2020 and December 31, 2020 and wish to claim the ERTC for such period by filing an IRS 2020 Form 941-X, is generally the later of (a) three years after the 2020 Form 941 was filed (but not before April 15, 2024), or (b) two years after the date the tax reported on the 2020 IRS Form 941 was paid.
• Under current guidelines, the deadline for eligible employers who satisfy all the requirements for claiming the ERTC with respect to any applicable period in 2021 and wish to claim the ERTC for such period by filing an IRS 2021 Form 941-X, is generally the later of (a) three years after the 2021 Form 941 was filed (but not before April 15, 2025), or (b) two years after the date the tax reported on the 2021 IRS Form 941 was paid.

• IRS Issues January 27, 2021 ERTC Announcement
• IRS Processing Backlog Estimates (click on filed a tax return)
• Treasury Guidance on Retroactive Access to 2020 ERTC (PDF)
• Treasury Guidance on 2021 Q1 and Q2 ERTC
• Treasury Guidance on 2021 Q3 and Q4 ERTC
• Form 7200: Advance Payments of Employer Credits
• Form 941 X: Claiming Credits for Previously Filed Quarters
• Form 941: Employer’s Quarterly Federal Tax Return
• Internal Revenue Service Employee Retention Credit FAQs (to be updated)
• Penalty Relief for Failure to File Employment Taxes (PDF)