UPDATE - Employee Retention Credit

Here are some tips for amending Form 941 for the Employee Retention Credit.

  • Twice the refund for half the work

    • A timely filed Form 941 for Q1 2021 did not have a line for Refundable Employee Credit earned in 2020.

    • An amended Q1 2021 Form 941-X has a line for all the ERC earned in 2020 AND a line for the ERC earned Q1 2021.

    • By filing an amended Q1 2021 941-X, the first and second period of refundable ERC can be claimed on one form.

  • Claim on a timely basis

    • Once past earned ERC’s have been claimed, file current 941’s on a timely basis.

    • Employers who claim ERC on timely filed 941’s are receiving the refund nearly 3 times faster than those filing 941-X’s

  • Review the interplay of ERC, PPP, FFCRA, and WOTC

    • Do not double dip into the credits and relief options!

    • The organization must “tag” each payroll dollar being used to one credit or relief program.

    • Get the advice of a professional, but in general

      • 1st allocate to PPP (Paycheck Protection Program) loan forgiveness, free money

      • 2nd FFCRA (Families First Coronavirus Response Act), 100% credit for spent funds

      • 3rd ERC (Employee Retention Credit), 50-70% refund of expenditure

      • 4th WOTC (Work Opportunity Tax Credit), 12.5%-40% credit of wages paid



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