Employers can still apply for the Employee Retention Tax Credit (ERTC) retroactively by filing Form 941-X, Employer Adjusted Federal Tax Return or Request for Refund, for each quarter in which they have paid qualifying wages. This credit was designed to encourage employers to keep employees on their payroll in circumstances where, otherwise, the employer would suspend the services of unpaid employees. The filing period for Form 941-X is up to three years after the original payroll tax due date, which is usually April 15.A second change favorable to taxpayers was the possibility of requesting credit for group health plan expenses, even in cases where these were the only salaries paid to employees. Many employers have already requested millions of dollars in tax credits through the ERTC.
Another major change was the ability of employers with 500 or fewer employees to attribute credit to all employees and not just to salaries paid to employees who didn't work. People who are self-employed are not eligible for the earnings credit, but they can be if their company has employees.The ERTC under the CARES Act encourages companies to keep employees on their payroll and provides a great opportunity for employers to receive a refundable tax credit. Employers should take advantage of this credit and apply retroactively if they have not done so already.
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