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Actual Deadline to Apply for the ERC

Actual Deadline to Apply for the ERC

 

Some tax advisors provide wrong information about deadlines for Employee Retention Credit (ERC) claims.  They say ERC 941 amendments must be filed within three years from each quarterly payroll tax filing date.  They indicate that results in a separate application deadline for each quarter.  For example, some tax advisors say the deadline to amend the second quarter of 2020 is July 31, 2023 (i.e., three years from the filing deadline of 7/31/2020).  

 

So what are the correct deadlines for filing an ERC claim?

There are only two deadlines for ERTC claims: For all 2020 ERTC applications, the deadline to apply is April 15, 2024.  For all 2021 ERTC applications, the deadline is April 15, 2025.

The ERC refund application can only be filed using an IRS Form 941-X, “Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund.”  Form 941-X must be filed for each calendar quarter for which ERC is claimed.  The original Form 941 is due by the last day of the month following the end of each quarter.  Amendments to federal tax returns generally need to be filed within three years of the original due dates to be considered timely filed. 

By statute, Form 941-X amendments are slightly different.

The IRS instructions to Form 941-X state:

  • Is There a Deadline for Filing Form 941-X?  Generally, you may correct overreported taxes on a previously filed Form 941 if you file Form 941-X within three years of the date Form 941 was filed or two years from the date you paid the tax reported on Form 941, whichever is later.  You may correct underreported taxes on a previously filed Form 941 if you file Form 941-X within three years of the date the Form 941 was filed.  We call each of these time frames a “period of limitations.” For purposes of the period of limitations, Forms 941 for a calendar year are considered filed on April 15 of the succeeding year if filed before that date.

That last sentence is the key, “For purposes of the period of limitations, Forms 941 for a calendar year are considered filed on April 15 of the succeeding year if filed before that date.” This rule is derived from Section 6513 of the Code in which subsection (c), “Return and payment of Social Security taxes and income tax withholding,” includes the rule that “(1) If a return for any period ending with or within a calendar year is filed before April 15 of the succeeding calendar year, such return shall be considered filed on April 15 of such succeeding calendar year.”

This means that while Form 941 for the second quarter of 2020 was originally due on 7/31/2020; the third quarter was due on 10/31/2020; and the fourth quarter was due on 1/31/2021, all of those returns are considered filed on 4/15/2021.  This sets the three-year statute of limitations for amending any returns as of 4/15/2024.  

 

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