A chamber of Congress recently voted to pass legislation that contemplates ending the Employee Retention Credit (ERC) program on 1/31/24. Since we’re past 1/31 and into February, is it too late to file for ERC?
When is the ERC filing deadline?
The ERC program guidelines indicate the deadlines to file for ERC are as follows:
2020 credits must be filed by April 15, 2024
2021 credits must be filed by April 15, 2025
The legislation proposes ending ERC far in advance of these deadlines.
Why does the new legislation propose ending ERC?
The new legislation contemplates introducing new tax credits, expanding existing personal tax credits, and implementing updates to business tax credits. To fund these initiatives, the bill proposes accelerating the ERC filing deadline to January 31, 2024. The budget allocated towards ERC filings through 2025 would then be reallocated to the proposed legislation’s programs.
What’s the current status of the legislation?
The legislation was approved by the House on January 31, 2024 and awaits review by the Senate. The Senate is currently in recess until February 26th, so the earliest legislation can progress or be vetoed is the last week of February. If the Senate approves the bill, it would be sent to the President for final consideration.
What does this mean now that we’re in February?
Given that the legislation cannot be finalized until the end of February at the earliest, it is unlikely that the bill would be passed in its current form with a 1/31/24 ERC filing deadline. If the bill passes, the more likely scenario is that the ERC deadline would be updated to coincide with the date it is approved, or there may be a short grace period to file any remaining ERC claims after the legislation is finalized.
What should I do now? Can I still file for ERC?
Your next steps depend upon your ERC filing status.
If you’re in the process of filing for ERC, continue to file and be prompt with any follow up. ERC provides meaningful capital to eligible businesses. If you’re filing with a group like us at NEWITY, you’re not charged a fee until you receive your ERC claim.
If you’ve already started the process with our team at NEWITY, please continue to be responsive to your ERC representative.
If you’ve paused your application with us and would like to resume it, please email your ERC representative. You can find their email by searching for “@newitymarket.com”.
If you haven’t filed and believe you may be eligible for ERC, start an application now. Credible ERC processors should thoroughly review your eligibility for the program. Depending on your business’ operations and performance in 2020 and 2021, this review can take several days.
Start your ERC application by creating a NEWITY account and clicking ‘Start Application’ on the ERC tile.
If you already filed for ERC, the IRS’ moratorium continues to delay the issuance of refund checks. If you need faster funding, consider an ERC Advance program.
How can I stay up to date if the bill passes?
NEWITY will continue to keep its members informed of the bill’s progress via email and in our Insights corner.
If you’d like to receive updates in your inbox, create a free NEWITY account today.