A Guide to the Delta Variants Impact on the ERC Deadline

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How the Delta Variant Impacts the Employee Retention Tax Credit Deadline

Wondering what the ERC deadline is? The uncertainty of the COVID-19 pandemic continues as the Delta variant has spread around the globe, creating new outbreaks and shutdowns. The new variant is more contagious than previous versions of the virus, and some Americans who have been vaccinated may still get a breakthrough infection, though they are not too common.

The government has implemented several COVID-19 relief packages since the beginning of the pandemic, including the CARES Act, the Consolidated Appropriations Act, and the American Rescue Plan. Included in the relief were tax credits, such as the Employee Retention Credit (or ERC) for some businesses that avoid laying off employees. Credits like these may be impacted by the Delta variant in more ways than one, but they will end at some point.

It is thus more important than ever that business owners take advantage of these programs before the deadline. What is the Employee Retention Credit? What should employers be doing to stay prepared? Here are additional details about dealing with the Delta variant and potential impacts on businesses and tax relief.

Reasons to Apply for the Employee Retention Credit Now

The Delta variant could mean new legislation is coming to provide additional relief for Americans and business owners. Why should you apply for tax relief now? Here are a few good reasons to apply for the Employee Retention Credit soon before the ERC deadline hits in December 2021:

Changing Deadlines and Legislation

The Employee Retention Tax Credit deadline is the end of 2021, but that could change, as the virus continues to be unpredictable. Make sure you apply now in case any restrictions are added to the law. You don’t want to assume that the deadlines will be extended again into 2022, so take advantage of the credit now.

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Stay in Business

The Employee Retention Tax Credit exists so you don’t have to let people go and can keep your employees on the payroll. Claiming the credit can be significant for your business. You could get a potential $5,000 per employee for 2020 quarters and $28,000 per employee for 2021 quarters.

Get Relief for New COVID Precautions

The Delta variant could prompt the nation, or at least your state, to implement mask requirements, vaccination mandates, or other protocols for safer workplaces. You may need additional PPE to follow these guidelines. Get tax relief so you can focus on those expenses.

You never want to put off claiming the ERC, especially as the Delta variant has entered the picture and could cause additional harm to your business in the long run. Talk to a tax expert with questions if you’re not sure how to get started.

5 Delta Variant Tips for Businesses

Start preparing now for another upswing in cases, even if your business or community hasn’t been hit hard yet. The Delta variant is a great example of how we can’t control what happens next. Here are five tips for employers to stay in business and manage the new variant:

1. Keep Employees on the Payroll

You may not be able to continue taking advantage of tax relief like the employee retention credit if you have to let workers go. Try to keep everyone on the payroll so you meet all qualifications for government programs like these.

2. Monitor the Rise in Cases

It is always wise to keep tabs on what’s happening with the virus and the Delta variant. Pay attention to the news and your industry for the latest updates. Implement a strong communication process so you can keep employees informed about what’s going on.

3. Remember that Q4 2021 Is Here

Businesses like retailers and restaurants often see a surge in Q4 when the holidays are coming. Make sure you retain employees during these busier times by taking advantage of all relief programs you’re eligible for.

4. Don’t Miss the ERC Deadline

You never know which relief programs will stay and which will go. You can apply for the Employee Retention Tax Credit now if you are eligible, meaning you saw a 50% decrease in gross receipts during a period in 2020 when compared to the same quarter in 2019, or a 20% decrease when comparing 2021 quarters to 2019. You also must have experienced a full or partial shutdown because of governmental orders.

The ERC deadline is December 31, 2021, as of now, but businesses can claim it up to three years from the date of filing their applicable return. Monitor changing legislation that could change the credit in the future.

5. Determine Eligibility for Other Relief Programs

There may be other COVID relief programs out there you can apply to this year. The Paycheck Protection Program (PPP) offered loans to qualifying businesses, and while the program ended in May 2021, it could always come back as the Delta variant continues. Other programs may be the Economic Injury Disaster Loan, the Shuttered Venues Grant, or the Restaurant Revitalization Fund.

Remember that preparation can go a long way during the pandemic. Make sure you’re acting now instead of waiting to see what happens with virus variants or new legislation. The health of your business may depend on whether you are claiming tax credits like the employee retention tax credit in 2021.

ERC Today Can Help You Keep From Missing the ERC Deadline

Many business owners just don’t know how to determine eligibility for tax breaks or claim relief when they qualify. Leave it to the tax experts at ERC Today. We know the ins and outs of the Employee Retention Credit and can break everything down for you.

We help you get through the ERC application process with quick, easy, and flexible assistance. ERC Today provides consulting and application support from our tax experts, and we store your information in a safe and secure client portal. Start your ERC application online today, or contact the team at ERC Today to get started.

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More Great Information For Employers:

On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act into law, and the Employee Retention Credit sunset date was moved from 12/31/2021 date to 9/30/2021 (for businesses other than ARPA Recovery Startup Businesses). 

HOWEVER, this does not mean the ERC was eliminated! Eligible businesses can still apply for stimulus funds based on financials between 3/13/2020-9/30/2021.