Do You Have to Pay Back Your ERC Refund? Here’s What Business Owners Need to Know
The Employee Retention Credit (ERC) was a game-changer for businesses aiming to recover financially after the challenges of 2020 and 2021. It provides payroll tax credits for qualified wages, giving business owners access to substantial, refundable cash credits. Despite its benefits, questions about the ERC’s guidelines—and particularly around repayment—still linger.
ERC Refund: No Repayment Required
The ERC isn’t a loan—it’s a refundable tax credit. This means that if your business meets the eligibility criteria, the funds you receive are yours to keep, with no repayment required. Eligible businesses can secure up to $26,000 per W2 employee without the stress of future repayment.
Are You Eligible for the ERC? Here’s How to Know
Of course, understanding the criteria for eligibility is key. The IRS has specific guidelines in place to ensure the credit goes to qualifying businesses only. So, knowing if you qualify and how to substantiate your claim is essential.
To be eligible, your business must have experienced either of the following:
- Significant Decline in Revenue
- Your business must have experienced a decline in gross receipts by more than 50% in any quarter of 2020 when compared to the same quarter in 2019. For 2021, the benchmark shifts slightly to a decline of 20%.
- Government-Ordered Shutdowns
- If your business faced a full or partial shutdown due to government orders—whether at the federal, state, or local level—you might also qualify.
Can You Still Claim Your ERC Refund?
The window to claim this credit has partially closed. While the deadline to file for 2020 has passed, eligible businesses can still claim the ERC retroactively for wages paid in 2021. If you paid qualified wages between January 1 and December 31, 2021, you have until April 15, 2025, to amend your tax return and claim your ERC refund.
Secure Your ERC Refund with Confidence
Navigating IRS guidelines can be complex, but Save My ERC is here to make it easier. Whether you’re confirming eligibility, amending a claim, or preparing for a potential audit, our licensed financial experts provide the knowledge, representation, and guidance to secure your ERC refund confidently.
Don’t leave your ERC refund to chance. Schedule a meeting with us today to ensure your claim is accurate, compliant, and as beneficial as possible.