The Employee Retention Credit (ERC) has been one of the most impactful tax relief programs for businesses in recent years. Designed to reward employers for keeping staff on payroll during periods of economic disruption, the ERC has delivered billions of dollars in refunds to companies of all sizes. But as the program winds down, many business owners are asking: Will the ERC continue, or is this the final chapter?
Understanding the ERC’s Current Status
The Employee Retention Credit was initially introduced in 2020 under the CARES Act, expanded in 2021 by subsequent legislation, and later phased out for most employers after September 30, 2021. Recovery startup businesses were eligible through the end of 2021. Although new claims for current periods are no longer available, businesses can still file retroactively to claim credits for past eligible quarters.
Current Deadlines for Filing
While the program itself is no longer active, the Employee Retention Credit can still be claimed for past quarters within the statute of limitations:
- 2020 ERC claims: File until April 15, 2024.
- 2021 ERC claims: File until April 15, 2025.
These dates give employers a window to review eligibility and submit amended returns, even though the program has ended for ongoing wages.
Will the Program Be Extended?
At this time, there are no active legislative proposals to extend the Employee Retention Credit for future periods. Lawmakers have shifted focus to other relief measures and long-term economic policies. However, in times of economic instability, Congress has historically revived or introduced similar programs to support businesses, so it’s not impossible that a future credit could be modeled on the ERC.
Possible Program Changes
If the Employee Retention Credit or a similar program were revived, changes could include:
- Narrowed eligibility to target industries most affected by economic disruptions.
- Lower credit amounts to reduce federal budget impact.
- New compliance requirements to address concerns about fraudulent claims.
Businesses that understand the ERC framework now would be in a strong position to take advantage of any future iteration.
Preparing for What Comes Next
Even though new ERC periods are unlikely in the immediate future, employers should:
- File all eligible retroactive claims before the deadlines.
- Maintain thorough documentation to support filed claims in case of IRS review.
- Stay informed about legislative developments that could revive or replace the ERC.
Why It’s Still Relevant
The Employee Retention Credit continues to be valuable because many businesses still have unclaimed credits. Even if the program is not extended, the opportunity to claim significant refunds remains open for another year or more, depending on the period.
Lessons from the ERC
The success of the Employee Retention Credit shows the power of direct, refundable tax credits in helping businesses stabilize during crises. Companies that were proactive in understanding and applying for the ERC often experienced less disruption and had stronger cash flow compared to those that waited.
Conclusion
While the Employee Retention Credit is unlikely to continue in its current form, its impact will be felt for years. Businesses still have time to file retroactive claims and secure refunds before deadlines expire. Whether or not the program returns, staying informed and prepared ensures your company can take advantage of future relief opportunities. Act now to capture the ERC benefits still available and position your business for whatever comes next.