The Twelve Days of Taxmas – Employee Retention Credit   

As Christmas approaches, Klatzkin is putting a twist on a holiday classic. But rather than filling your head with drummers drumming and golden rings, we’re focused on providing tips through “The Twelve Days of Taxmas” blog series that could help minimize your tax liability.

On the ninth day of Taxmas, my accountant gave to me an Employee Retention Credit (ERC).

The ERC allows a business or nonprofit organization with employees to take a credit against quarterly payroll taxes for the second quarter of 2020 through the third quarter of 2021. The credit in 2020 is a maximum of $5,000 per employee*, and $7,000 per employee per quarter in 2021, for a total possible credit of $21,000 per employee*.

*If all qualifications are met.

The Infrastructure Investment and Jobs Act signed into law by President Biden on November 15, 2021, contained a provision that retroactively terminated the ERC as of October 1, 2021. The termination applies to all employers except recovery startup businesses. However, if you have not looked into whether or not your business or nonprofit organization qualifies for the ERC, there’s still time. Employers have three years to claim a retroactive ERC refund on previously paid qualified wages for past calendar quarters by filing an amended return.

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If you have any questions about the retroactive termination of the ERC or if you need assistance filing an amended return, click here to contact us. We look forward to speaking with you soon.

©2021 Klatzkin & Company LLP. The above represents our best understanding and interpretation of the material covered as of this post’s date and should not be construed as accounting, tax, or financial advice. Please consult your tax advisor concerning your specific situation.