ERC Credit 2023: How Businesses Claim It

  • Mar 2
ERC Credit 2023:  How Businesses Claim It

Since forced to close their doors due to the COVID-19 pandemic, many businesses have already submitted their claim for ERC credit. If you need to, there’s still time to do it.

The federal government initiated a unique ERC program to assist every recovery start-up business to remain operational throughout the pandemic. You still have time to file for your ERC credit under the CARES Act, which has helped thousands.

What Is ERC Credit?

Employee Retention Credit (ERC) is a refundable retention tax credit intended to assist employers in recovering from the financial difficulties of COVID-19.

Between March 2020 and January 1, 2021, eligible employers could claim up to 50 percent of their qualifying wages. However, the maximum limit per employee falls at $10,000.

There is no denying the significant contribution this makes toward assisting small and medium-sized businesses keep up with their payroll and operations.

It is best to consult professionals for clarification or more information regarding ERC credit eligibility. You can start your ERC application with the assistance of knowledgeable and experienced employee retention tax lawyers.

One of the many eligible businesses passing up opportunities could be your own.

How to Claim the Employee Retention Tax Credit for Your Business

It should come as no surprise that government-prescribed orders have made it nearly impossible for small businesses to survive during the pandemic.

Even though the ERC tax credit phasing out officially, many businesses still need to learn that it exists. Because you can now retroactively claim your ERC credit thanks to the constant updates made to the ERC program.

Who Is Eligible?

Businesses must meet the following criteria to qualify for the ERC credit in 2023:

  • Business must be a private sector or tax-exempt organization.
  • Businesses that experienced partial or total shutdowns due to COVID-19 mandates.
  • 2020 gross receipts must be 50% less than in 2019, and 2021 gross receipts must be 80% less than 2020.
  • Self-employed can only claim ERC credit if they have employees.
  • Government entities cannot receive ERC credit in 2021 except for tax-exempt public schools and hospitals.
  • Those with over 100 full-time employees in 2020 may claim ERC tax credit only for those who worked.
  • Those with less than 100 full-time employees may claim ERC credit for all employees, regardless of whether they worked.
  • The threshold raised to 500 full-time employees in 2021.

You have until 2025 to take advantage of the ERC program if, for some reason, you were unable to do so before.

For all quarters in 2020, the deadline for submitting an ERC application in 2023 has been pushed back to April 15, 2024. Meanwhile, all quarters of 2021 have until April 15, 2025.

When Can I File for ERC Credit?

The tax credit can be claimed by small to midsize businesses up to three years after the filing of their tax return. As long as you satisfy the prerequisites for participation, you still have time to take advantage of the opportunity.

The deadline for submitting claims for unclaimed credits for 2020, 2021, and 2025 has been extended to April 15, 2024 and April 15, 2025 respectively.

Filing a claim can be time-consuming, and you might encounter a few different eligibility nuances. If you want to avoid complications, prepare the appropriate documents ahead of time and fulfill all of the requirements.

Can All Businesses Qualify?

The ERC tax credit is not available to all businesses, of course. There has been a great deal of confusion and questions, and eligibility must be clarified before answering.

Unfortunately, many small businesses incorrectly assume they are eligible based solely on one provision rather than considering all the others. For instance, a business may meet the requirement to be regarded as a tax-exempt organization. However, it might not be directly affected by a COVID-related government ordinance.

Despite how alluring they may sound, laws are typically complicated and have a great deal of wiggle room. These are just a few things to consider when it comes to the tax credit.

  • How the Internal Revenue Code (IRC) operates
  • What the IRC looks for when reviewing claims
  • What constitutes “more than the nominal impact”, and how to prove it
  • How to document your ERC credit claim

Working with an employee retention tax lawyer is the best way to learn how the legislation can benefit your business. Employ legal professionals who don’t make claims too good to be accurate, which could endanger your business.

How Can Your Employee Retention Tax Credit Lawyer Help Your Business?

ERC tax credit attorneys can help you get the most out of your benefits. From start to finish, they will be of assistance to your business. For example, they can help in areas such as:

  • Navigate tax laws surrounding ERC credit.
  • Explain how amendments or updates in tax law may affect your business.
  • Strategize tax compliance while leveraging on credits.
  • Get your business eligible for financial relief during unprecedented times.
  • Prepare and verify your business’ ERC credit eligibility.
  • Gives substantial tax advice.

Always be aware of your legal options and make the best use of the resources at your disposal. Whatever it is that your business needs to thrive in this ever-changing economy.

ERC Tax Credit FAQs

What Industries Are Eligible for ERC Credit?

  • Education
  • Technology
  • Real Estate
  • Construction
  • Hospitality and Restaurant
  • Industrial and Manufacturing
  • Religious Ortganizations
  • Non-profit Organizations
  • Tax-Exempt Government Organizations

You can start by determining whether or not your business falls into one of these categories.

What is Considered a Small Business for this Credit?

Your ERC credit eligibility varies from 2020 to 2021, depending on the size of your business and the number of paid employees.

ERC 2020 of large businesses means more than 100 full-time employees. Whereas ERC 2020 of small businesses means 100 or fewer employees. Companies with more than 500 full-time employees stand significant under the ERC of 2021. However, the 2021 standards consider companies with 500 or fewer small.

What is the Qualified Wage for Credit?

Wages that are considered qualified are those paid to employees by employers who are eligible for the tax break. Qualified wages include contributions to health care plans. The number of full-time employees employed by an eligible business will determine the ERC credit available to that business.

When the government issues orders to partially or entirely suspended business activities, large businesses must include wages for non-working employees in their qualified wages.

When a government regulation completely or partially halts business operations, these expenses, which small businesses bear, include compensation to all employees.


There is no reason not to claim this benefit, as there are not one but two deadlines for applying for ERC credit. However, it would help to keep wary of tax specialists making exaggerated promises.

Get the most out of your refund for 2023 by working with dependable and trustworthy employee retention tax attorneys.

Article guest written by Daniel Martin. Dan has hands-on experience in digital marketing as far back as 2007. He has been building teams and coaching others to foster innovation and solve real-time problems. Dan also enjoys photography and traveling.

Last updated March 23, 2023