Is There a Deadline to Claim Employee Retention Credit?

The Employee Retention Credit (ERC) was introduced as a lifeline for businesses during the COVID-19 pandemic’s peak. Designed to reward employers who kept staff on payroll despite disruptions, the ERC has provided billions in financial relief since its launch. However, with the program now closed to new wages, one critical question remains: is there a deadline to claim Employee Retention Credit?

The short answer is: yes, and that deadline has now passed.

As of 15 April 2025, all opportunities to file ERC claims—whether for 2020 or 2021 wages—are officially closed. That makes this a crucial time for businesses to understand what happens next, especially if you missed out.

What Is the ERC and Who Qualifies?

The Employee Retention Credit is a refundable payroll tax credit for eligible employers who experienced either a significant decline in gross receipts or were subject to a full or partial government order that affected business operations due to COVID-19. The credit is applied to qualified wages paid from March 13, 2020, through September 30, 2021 (or December 31, 2021, for certain recovery startup businesses).

Here’s what businesses were eligible for:

• 2020: Up to $5,000 per employee annually
• 2021: Up to $7,000 per employee each quarter for the first three quarters

The benefits were substantial, yet many eligible employers did not file.

The Final ERC Deadlines Are Behind Us

The IRS set two critical ERC claim deadlines:

• 2020 Wages: The Deadline was 15 April 2024
• 2021 Wages: The Deadline was 15 April 2025

These deadlines were based on the statute of limitations for amending quarterly payroll tax returns (Form 941) using Form 941-X. Unlike income tax returns, ERC was not claimed through standard business tax filings. That distinction confused many business owners, who thought they would have more time.

If your business didn’t file an amended Form 941-X before these dates, you are no longer eligible to claim the credit.

What Happens After You File?

Once a business submits an amended 941-X, the IRS begins processing the request. This process used to take about 90 to 120 days, but current timelines can stretch longer due to heightened scrutiny and a backlog of filings.

The credit, once approved, is sent via paper check, not direct deposit. Because of this delay, many businesses still awaiting 2023 claims may not receive checks until mid-to-late 2024. But filing now ensures you don’t miss the deadline.

What If You Missed the Tax Deadline?

For businesses that missed the ERC deadline, the unfortunate reality is that there is no current IRS recourse. The deadlines were firm and aligned with the federal statute of limitations—there is no grace period, appeal, or retroactive workaround at this time.

If this feels like a missed tax deadline, it’s because it is—but unlike filing a late income tax return, the ERC statute does not allow for penalty relief or late claims. It’s closed, not delayed.

However, there are still necessary steps you can take to assess your situation and safeguard your financial position.

What to Do If You Filed but Haven’t Been Paid

Tens of thousands of ERC claims were submitted in 2023 and 2024, and many of them remain in limbo. The IRS paused processing in late 2023 due to concerns about widespread fraud and resumed reviews under tighter scrutiny.

If your business filed before the deadline but still hasn’t received payment, here’s what to do:

1. Confirm filing dates – Make sure the Form 941-X was accepted and date-stamped before the April 2025 deadline.
2. Track your claim – Use the IRS-provided acknowledgment or submission receipts from your payroll provider or tax advisor.
3. Prepare documentation – Be ready for an audit. The IRS has increased ERC examinations, especially for large claims.
4. Avoid re-filing – Do not submit duplicate claims; it will only delay processing or raise red flags.

This is a crucial ERC update for 2025: claims filed on time will still be paid, but may take months or longer to process.

Think You Were Eligible But Missed It?

If you’re only now realising that your business may have qualified, the missed opportunity can feel devastating. Many owners stayed on the sidelines because of:

• Misinformation or conflicting advice
• Complex eligibility rules
• Fear of IRS scrutiny
• Not knowing that ERC was separate from income tax
• Not trusting aggressive third-party “ERC mills”

While the deadline has passed, there’s still value in understanding your eligibility in hindsight, especially if:

• You’re facing an IRS audit and need to demonstrate why you didn’t claim
• You filed partially (e.g., for 2020 only) and want to document your reasoning
• You’re preparing future tax strategies and want to avoid another missed window

What’s Next: Preparing for Potential IRS ERC Audits

The IRS is increasing enforcement on ERC claims through 2025 and 2026. If you did file before the deadline, be prepared:

• Keep payroll records for at least four years
• Save government orders if you used that eligibility path
• Document gross receipts calculations clearly
• Retain any third-party engagement letters and communications

If the IRS selects your business for review, having this material on hand is your best defence—and can help you resolve the matter swiftly.

Need Help Navigating the ERC? Wiss Can Help

Whether you missed the ERC deadline or you’re still waiting for a response, you’re not alone.

Wiss supports business owners with trusted tax advisory, audit preparation, and forward-thinking strategy. If you have questions about how to approach future tax credits, preparing for a potential ERC audit, or avoiding similar missed opportunities, Wiss can help you move forward with clarity.