How to Retroactively Claim the ERTC for 2020 and 2021

The Employee Retention Tax Credit (ERTC) was one of the most significant relief programs for businesses impacted by the COVID-19 pandemic. However, many business owners missed out on claiming ERTC when it was first available—either because they weren’t aware of the program or mistakenly believed they didn’t qualify.

The good news? You can still claim the ERTC retroactively for both 2020 and 2021 by filing an amended payroll tax return. With potential refunds of up to $26,000 per employee, this credit could mean substantial cash flow relief for your business.

In this guide, we’ll cover:
✔ Who qualifies for retroactive ERTC
✔ How much businesses can still claim
✔ Step-by-step instructions on how to apply
✔ Important deadlines you can’t afford to miss

If you haven’t yet claimed your ERTC refund, you still have time—but you must act quickly!

1. What Is the ERTC and Why Does It Matter?

The Employee Retention Tax Credit (ERTC) was created under the CARES Act in 2020 to encourage businesses to retain employees despite financial hardship.

Unlike other relief programs like the Paycheck Protection Program (PPP), the ERTC is a refundable payroll tax credit—meaning businesses receive actual cash refunds from the IRS rather than just a tax deduction.

💡 Even if your business received a PPP loan, you can still qualify for ERTC—thanks to rule changes made in 2021.

2. How Much Can You Still Claim?

Many businesses don’t realize how much money they’re leaving on the table by not claiming ERTC retroactively.

🚀 ERTC Refund Potential Per Employee:

YearCredit PercentageMax Wages Per EmployeeMax Refund Per Employee202050% of wagesUp to $10,000 for the year$5,000 total per employee202170% of wagesUp to $10,000 per quarter$21,000 total per employee

💡 Total Possible Refund: Up to $26,000 per employee across 2020 and 2021.

📌 Example:

• A business with 10 employees could receive up to $260,000 in tax refunds.

• A business with 50 employees could receive up to $1.3 million in refunds.

3. Who Can Still Claim ERTC Retroactively?

To qualify for ERTC in 2020 or 2021, businesses must meet one of two eligibility criteria:

✅ Option 1: Significant Revenue Decline

Your business qualifies if it experienced a drop in gross receipts compared to 2019:
✔ 2020: 50% or greater decline in any quarter vs. 2019.
✔ 2021: 20% or greater decline in any quarter vs. 2019.

🚀 New Rule for 2021: If a business did not meet the 20% decline in a quarter, it can use the previous quarter’s revenue decline instead.

✅ Option 2: Full or Partial Suspension of Operations

Even if your revenue didn’t drop enough, you may still qualify if your business was subject to government-mandated restrictions.

📌 Examples of Eligible Business Disruptions:
✔ Restaurants forced to close indoor dining due to COVID-19 mandates.
✔ Retail stores with capacity limits that restricted normal operations.
✔ Gyms, salons, or venues shut down due to health and safety orders.
✔ Businesses with supply chain disruptions that affected at least 10% of operations.

💡 If your business was impacted by any government order limiting operations, you could qualify for ERTC—even without a revenue decline!

4. How to Claim ERTC Retroactively (Step-by-Step Guide)

Since ERTC is claimed through payroll tax filings, businesses must file an amended payroll tax return to get their refund.

📌 Step 1: Gather Your Documentation

To determine eligibility and claim ERTC, you’ll need:
✔ Quarterly revenue reports from 2019-2021 (to check revenue decline).
✔ Payroll records from 2020 & 2021.
✔ PPP loan forgiveness documentation (to avoid double-dipping wages).
✔ Government order documentation (if claiming under the suspension rule).

📌 Step 2: Identify Eligible Quarters

✔ Compare quarterly revenue from 2020 and 2021 to 2019.
✔ Determine if your business experienced a government-mandated restriction that affected operations.

📌 Step 3: File IRS Form 941-X for Each Eligible Quarter

Since ERTC is claimed through payroll tax filings, businesses must file Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return) for each eligible quarter.

📍 How to File Form 941-X:
✔ Locate the original Form 941 filed for the quarter you are amending.
✔ Enter the corrected amount of qualified wages and the ERTC credit.
✔ Provide a clear explanation in Part 5, stating that you are amending to claim the Employee Retention Tax Credit.
✔ Mail the completed Form 941-X to the IRS (electronic filing is NOT available).

🚀 Pro Tip: If you’re filing for multiple quarters, submit each Form 941-X separately to prevent IRS processing errors.

5. How Long Do ERTC Refunds Take?

The IRS is experiencing backlogs with ERTC claims, and refunds can take 6-12 months to process.

How to Check Your ERTC Refund Status

📍 Call the IRS ERTC Refund Hotline: (800) 829-4933
📍 Request an IRS Account Transcript via www.irs.gov

💡 If your refund is delayed for over 12 months, you may be able to request assistance from the Taxpayer Advocate Service (TAS).

6. ERTC Filing Deadlines—Don’t Miss Out!

Businesses can still claim ERTC refunds, but deadlines are approaching fast:

📅 ERTC Filing Deadlines:
✔ April 15, 2024 – Last day to file for 2020 ERTC.
✔ April 15, 2025 – Last day to file for 2021 ERTC.

🚀 After these deadlines, businesses will lose their chance to claim ERTC permanently!

Act Now Before ERTC Expires

Many businesses still qualify for ERTC but haven’t filed yet. With millions in unclaimed refunds available, filing a retroactive ERTC claim could provide much-needed financial relief for your business.

💡 Key Takeaways:
✔ ERTC refunds are still available, but deadlines are approaching fast.
✔ Businesses can claim up to $26,000 per employee for 2020 and 2021.
✔ Filing Form 941-X is the only way to claim ERTC retroactively.
✔ IRS backlogs mean refunds take time—so apply as soon as possible.

How Business Networks Can Aid in Recovery:

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