What is the ERTC tax credit?

[xmasbaby0]

https://www.irs.gov/coronavirus/employee-retention-credit

https://www.irs.gov/newsroom/new-law-extends-covid-tax-credit-for-employers-who-keep-workers-on-payr...

[scott18]

Thank you for the links. I should have clarified my question. Can I just claim the credit on my 2021 federal tax return for the qualifying wages or do I have to complete the form 7200 now to obtain the credit or refund?

Thank you.

[macuser_22]

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@scott18 wrote:

Thank you for the links. I should have clarified my question. Can I just claim the credit on my 2021 federal tax return for the qualifying wages or do I have to complete the form 7200 now to obtain the credit or refund?

Thank you.

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Are you an employer?    The credit is for *employers* not employees.

See:

https://www.irs.gov/pub/irs-pdf/i7200.pdf

[Critter-3]

This has to do with payroll credits on the payroll tax forms and nothing to do with a personal tax return form 1040.   Read the instructions carefully and the 11/1 deadline for the third quarter. 

[scott18]

Hello,

Thank you for your reply. I own an S Corp with only 1 employee (myself). I pay myself a monthly salary and complete the quarterly 941 to the IRS and make quarterly deposits to the IRS for withholding and FICA withholdings for employer and employee. I also received PPP money this year and last year for the w-2 wages. I just recently found out about the ERTC and was wondering if I qualify and how to proceed with it.

Thank you...

[Critter-3]

Read the 7200 form instructions carefully.  

It is NOT a credit on the 1120S either.  

[scott18]

Hello,

Thank you for your reply. I have read many pages now about this and I'm still not sure what this does. I understand that I have to complete form 7200 and I should have done this along with my quarterly 941 forms for 2021. Does this allow for the employer to reduce the amount of the employer side of FICA payment that is due (SS and medicare the 7.65%) of 70% of 2021 wages paid for each quarter? For example, if I had $5000 in quarterly wages for 2021 that I could reduce the employer side FICA payment, the 7.65%, by 70% or $267.75?

Thank you...

[Critter-3]

None of my clients have chosen or qualified for this credit (not sure how you can even qualify since you are the only employee of your own company) so I cannot help you further.   Maybe you can ask a payroll company for more information.