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How to Fill Out 941-x for ERC and Claim Your COVID-19 Tax Break
The pandemic was a tough time for most business owners. With lockdowns across many states and a sharp decline in customers, most businesses took a major hit during that period. However, a tax credit was announced by the government to provide financial relief to impacted businesses.
However, claiming the ERC can be a complex process, and it requires a thorough understanding of the associated tax forms and regulations. In this article, we'll provide a comprehensive guide on how to fill out Form 941-X for ERC so that you can make the most of this valuable tax break.
Lastly, we'll introduce you to a company that can easily help you claim this benefit!
Understanding the Employee Retention Tax Credit
Before filling out the ERC, here’s a quick overview of what the program was. The Employee Retention Tax Credit was designed to help businesses retain their employees through the COVID-19 pandemic. For each employee an impacted business retained, they could obtain a tax credit on the wages paid to them.
The program was launched in two phases. Initially, only businesses who had partially or fully suspended their operations during government orders could claim it, like when certain states announced lockdowns. However, it was soon expanded to all businesses that saw a decline in their gross receipts.
Overview of Form 941-X
Now that you have a better understanding of what the ERTC is, you'll need to dive a little deeper into the tax form you'll need to fill out. We believe it's vital for you to know about it since making mistakes can make this process a lot longer.
The form you’ll need to fill out is the 941-X, also used as the form to correct errors made on Form 941 regarding the wages paid to employees. Firstly, you’ll need to include information about the specific quarters in which you’re claiming credits. Lastly, you will also need to include all the information regarding your employees’ wages paid during that period and the credit you wish to claim.
Step-by-Step Guide to Filling out Form 941-X
While claiming the credits may seem tedious, you just need to ensure you have the right information. Here's a step-by-step guide on how to fill out the 941-X form:
- Fill in your Basic Information: The top section typically requires basic information about your business, including the name, address, and Employer Identification Number.
- Complete Part 1 & 2 of the form: Part 1 of the form asks for the corrections you're making to the 941 forms. In Part 2, you'll need to fill out the corrected information, including total wages, taxes withheld, and other financial information.
- Calculate the amount of ERTC: After filling out the form, you'll need to calculate the ERC that you will claim. Reach out to The Platinum Group for help in calculating how many credits you can claim.
- Complete the Bottom Section: This section will ask you why you're filling out the form. Please fill it out properly to claim the credits.
Final Thoughts - Reach out to The Platinum Group!
Filling out the 941-X may seem tricky; however, this guide gives you a good overview of what to expect. If you're short on time, reach out to the Platinum Group to assist you in filling out the form!
Also, if you own a hotel or restaurant read our short article Hotels and Restaurants Claim Your ERTC Funds for practical advice!