Recovery startups businesses may apply for the employee retention credit in Q4 2021.
The Employee Retention Credit (ERC) is a refundable tax credit. Startups may benefit from it.
RSB Businesses
If you started your business after February 15, 2020 and meet a few other requirements, your business may qualify as a Recovery Startup Business (RSB). If that’s the case, you are eligible for the employee retention credit (ERC) for qualified wages that you paid between October 1, 2021 and December 31, 2021. You may get from the Federal Government a check of as much as $50,000 per calendar quarter.
All other businesses
You can only claim the ERC for eligible wages paid on or before September 30, 2021. This is because the Infrastructure Investment and Jobs Act, P.L. 117-58, retroactively terminated the ERC at the end of September 30, 2021 for businesses other than RSB.
If you’re not a recovery startup business but received an advance payment of the ERC or if you reduced your employment tax deposits in anticipation of receiving the ERC for the fourth calendar quarter of 2021, you may repay or deposit the taxes without penalty.
The ERC is a refundable tax credit that Congress enacted in 2020 to help small businesses impacted by COVID-19 in retaining their employees.