To apply for the ERTC with their quarterly returns, business taxpayers will need additional payroll data and other documents. This rule is derived from Section 6513 of the Code, in which subsection (c) “Reporting and Payment of Social Security Taxes and Income Tax Withholding” includes the rule that: “(If a return is filed for any period ending on or within one calendar year before April 15 of the following calendar year, such return shall be considered filed on April 15 of that next calendar year). Eligible businesses that experienced a decline in their gross revenues or that closed due to a government order and didn't apply for the credit when they filed their original return can take advantage of it by filing adjusted payroll tax returns. Some tax advisors are misstating the rules related to the deadlines for employee retention credit (ERC) applications.
The ERC can only be filed using IRS Form 941-X, “Adjusted Federal Tax Return or Employer Refund Request.” Most employers file these quarterly tax returns, so they must use Form 941-X (Adjusted Quarterly Employer Tax Return). To apply for credit for previous quarters, employers must file Form 941-X, Employer's Adjusted Quarterly Federal Tax Return or Request for Refund, for the applicable quarters in which qualifying wages were paid. They can say that amendments can be submitted up to three years after the filing date of each quarterly payroll tax, resulting in a different deadline for applying for the ERC for each calendar quarter. Filing amended employment tax returns can be difficult, especially if you don't normally file these returns.
Employers who use a Professional Employers Organization (PEO) or a Certified Professional Employer Organization (CPEO) do not file an individual 941 on their behalf, so it's important that they understand how they would reconcile this information and receive credit. Eligible employers can still apply for the ERC for previous quarters by filing the appropriate adjusted employment tax return within the deadline set out in the instructions on the corresponding form.