Employee Retention Tax Credit Update—Time to Get Filing

If you know, or think it’s likely, that you will be an eligible employer for the Employee Retention Tax Credit (ERTC) in the third calendar quarter of 2021, now is the time to get going!

PBO Advisory Group is currently assisting over one hundred clients with their assessments, quantifying their eligibility, and executing the claim process.

“By acting on the original 941 filing, you are able to monetize your credits faster than filing a paper amendment after the fact,” states Scott Palka, a Consulting CFO of PBO Advisory.

What PBO Advisory has learned from our discussions with the IRS is that paper amendments are taking 20+ weeks to process, and that’s after they have been opened and assigned to an IRS resource. However, claims on original returns are being received by employers in approximately two months after the end of the calendar quarter.

We have many clients who have been able to monetize even sooner, by deferring the Federal payroll tax deposit in anticipation of the ERTC.  We anticipate the IRS processing time on paper amendments to increase as more employers file amendments, adding to the IRS backlog, which is already quite significant.

One important potential development is that the infrastructure bill that is now being considered contains a provision to sunset the ERTC for the 4th quarter of 2021.

According to Scott, “We don’t know if the bill will eventually become law, and we don’t know if this provision will survive, but at this point in time the 4Q ERTC is at risk. We encourage eligible employers to contact your legislators and let them know that the ERTC is important for small businesses as they continue to recover from the economic effects of the pandemic.”  Interestingly, one of the reasons cited for the sunset is the belief in Washington that the ERTC program has low utilization.

PBO Advisory encourages every employer to review their situation to see if they are an eligible employer during the period from 3/13/2020 to 6/30/2021 and also consider 3Q 2021 eligibility.

If you have questions or would like to discuss your ERTC potential, please reach out to PBO Advisory at 858-622-1681 to schedule a complimentary review.

Scott Palka, CPA, MBA, CFA
Consulting CFO & Member
(858) 935-4847