Tax advisors often misstate the rules related to the deadlines for employee retention credit (ERC) applications. It is essential to know the filing deadline for the employee retention tax credit in order to get the full benefits of the employee retention tax credit. To do this, employers must use Form 941-X, amended quarterly federal tax returns from the employer, and credit the refund to each worker for retroactive filing. Businesses that experienced a decline in their gross revenues or that closed due to a government order and didn't apply for the credit when they filed their original return can still take advantage of it by filing adjusted payroll tax returns. The rule is derived from Section 6513 of the Code, which states in subsection (c) “Reporting and Payment of Social Security Taxes and Income Tax Withholding” that: “(If a return is filed for any period ending on or within one calendar year before April 15 of the following calendar year, such return shall be considered filed on April 15 of that next calendar year).
Most employers file these quarterly tax returns, so they must use Form 941-X (Adjusted Quarterly Employer Tax Return). Eligible employers can still apply for the ERC for previous quarters by filing the appropriate adjusted employment tax return within the deadline set out in the instructions on the corresponding form. Employers who use a Professional Employers Organization (PEO) or a Certified Professional Employer Organization (CPEO) do not file an individual 941 on their behalf, so it's important that they understand how they would reconcile this information and receive credit. The ERC can only be filed using IRS Form 941-X, “Adjusted Federal Tax Return or Employer Refund Request.” To apply for credit for previous quarters, employers must file Form 941-X, Employer's Adjusted Quarterly Federal Tax Return or Request for Refund, for the applicable quarters in which qualifying wages were paid. The IRS states that amendments can be submitted up to three years after the filing date of each quarterly payroll tax, resulting in a different deadline for applying for the ERC for each calendar quarter.
Form 941-X will be used to retroactively submit the applicable quarters in which qualifying wages were paid. This means that employers have three years from the original due date of their tax return to apply for the ERTC.
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