How do you claim the ERC?

The Employee Retention Credit allows multiple ways for businesses to quickly receive the benefit. Here are three methods used to claim the benefit:

METHOD 1: Advance Credit Request (Form 7200) Now obsolete

Small businesses are permitted to request an advance credit based on wages paid in 2019 and anticipated wages for the current calendar quarter.

METHOD 2: Immediately Reduce Federal Deposits (Form 941) Now obsolete

Qualified businesses that anticipate an ERC in the current calendar quarter can immediately monetize the credit benefit by reducing federal payroll tax deposits (EFTPS) up to the amount of the anticipated credit. When the quarter closes, Form 941 will be used to reconcile credits and tax liabilities.

METHOD 3: Amend Withholding Tax Returns (Form 941-X)

The most common way that businesses have received the ERC benefit is by amending a previously filed Form 941 using Form 941-X Taxpayers typically have a three-year statute of limitations to file a Form 941-X. Once the withholding return has been amended, the IRS will process the credit and apply it as an overpayment on the account. Taxpayers can elect to utilize the credit against future withholding returns or request a refund check for the overpayment