There’s been movement recently with a congressional push to reinstate the 4th Quarter 2021 ERC in a covid/emergency relief bill. A bi-partisan group from both Houses is now pushing for reinstatement.
A coalition of over 70 associations and organizations are also supporting the bill. Of course, small and medium-sized businesses are also backing the push.
We’ll see if this gets any traction.
ERC Still Available
The amendment rules for payroll tax returns are similar to those of income taxes. We have up to 36 months from the due date of the original return, to amend your 941, claiming the ERC.
That gives us the better part of a couple of years to still claim up to $26,000 in credits between the 3rd Quarter of 2020 and the 3rd Quarter of 2021 for each covered employee.
When congress originally passed the ERC, it was presumed that at least 70% – 80% of all small and mid-sized businesses would claim it. This wasn’t intended just for businesses that were “in trouble”. It was for all businesses to help keep people on their payrolls.
Sadly, the percentage of businesses claiming the credit is well under 10%. The primary reason for this is that most accountants have failed in claiming the credit.
The IRS has made them difficult to receive. I’ve done thousands of these over the past 18 months and have come up with 13 reasons that the Service now uses to deny them. They’re actively trying to save money for the Federal Government. But given our experience, we haven’t had one denied in the better part of a year.
Processing Times Have Increased
It’s now taking even longer for the IRS to process these returns and mail out the checks. Last year the lag time was up to 6 or 7 months.
Then tax season hit and things became even more tardy.
The IRS has stopped sending out their monthly performance updates so we don’t know any exact processing times. But the credits we did 10 or 11 months ago are now being funded, so please use that as a guide.
If you haven’t yet signed up for our Employer Retention Credit Consulting and Preparation Program, please use the following link to begin the process.
Let me leave you with this.
I’ve received messages from a couple of you who were upset when you received amendments on your corporate and personal returns from 2020. Claiming the ERC on either the 3rd or 4th Quarter of 2020 necessitates these amendments.
Is this fair? Is it reasonable? Absolutely not. But back when we were doing these we had no idea that the Service would change the rules once again, at a very late date, forcing us to amend the 2020 returns no matter when the payments were received.
This isn’t up to us, and we didn’t make the ridiculous rules. But we all need to follow them.
I know that filing amendments isn’t a good time on a Saturday night, but no matter what, you’re still money ahead.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, PPP Loan Forgiveness, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Accounting Solutions Ltd.
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