ERTC Filing Mistakes

March 27, 2023

The Employee Retention Tax Credit (ERTC) is a valuable tax incentive program designed to help businesses financially impacted by COVID-19. This credit enables employers to retain employees and maintain payroll, even during times of economic hardship.

But as with any tax-related matter, the process can be complex and prone to errors. In this article, we'll discuss common ERTC filing mistakes and provide guidance on how to avoid them.

Importance of ERTC

The ERTC is vital for both employers and employees. It helps businesses stay afloat and keep their workforce employed, while also ensuring workers receive their wages during challenging times. Avoiding filing mistakes is crucial to ensuring your business can take full advantage of the ERTC benefits.

Common ERTC Filing Mistakes

There are several common mistakes businesses make when filing for the ERTC. Being aware of these pitfalls can help you avoid them and maximize your tax credit.

Incorrect Employee Classification

One common mistake is incorrectly classifying employees as either full-time or part-time. The ERTC has specific guidelines for determining full-time equivalent (FTE) employees, and misclassifying your workforce can lead to a reduced tax credit or even disqualification.

Misunderstanding Eligibility Criteria

Many businesses are unaware of the specific eligibility criteria for the ERTC. For example, businesses must have experienced a significant decline in gross receipts or been subject to a government-mandated shutdown to qualify. Failing to understand these criteria can lead to denied claims or penalties for incorrect filings.

Calculation Errors

Another common issue is calculation errors. The ERTC has specific rules for determining the amount of credit you're eligible for, and mistakes can result in an inaccurate claim. Ensuring that you follow the appropriate guidelines and double-check your calculations is essential for a successful filing.

Missing Documentation

Filing for the ERTC requires extensive documentation to support your claim. Failure to provide the necessary paperwork, such as payroll records or proof of business disruption, can result in a denied claim or delays in receiving your credit.

Late Filing

Finally, missing the deadline for filing can lead to a loss of credit. The ERTC has strict deadlines that must be adhered to, and businesses that miss these deadlines may be unable to claim the credit.

How to Avoid ERTC Filing Mistakes

To ensure a successful ERTC filing, follow these best practices:

Proper Employee Classification

Make sure you classify your employees correctly, following the specific guidelines for determining full-time equivalent (FTE) employees. Accurate classification will help you maximize your credit and avoid disqualification.

Understanding Eligibility Criteria

Take the time to thoroughly research and understand the eligibility criteria for the ERTC. Familiarize yourself with the requirements, such as the decline in gross receipts or the government-mandated shutdowns. Knowing the criteria will help ensure that you file correctly and avoid denied claims or penalties.

Double-Checking Calculations

Be meticulous when calculating your ERTC credit. Double-check your numbers and ensure you follow the specific guidelines for determining the amount you're eligible for. Accurate calculations will help you avoid mistakes and maximize your credit.

Maintaining Accurate Documentation

Keep detailed records and gather all necessary documentation to support your ERTC claim. This includes payroll records, proof of business disruption, and any other relevant documents. Having accurate and complete documentation will make the filing process smoother and reduce the risk of a denied claim.

Timely Filing

Mark your calendar with the ERTC filing deadlines and make sure you submit your claim on time. Late filing can result in a loss of credit or even disqualification, so it's essential to be proactive and timely in your filing process.


ERTC filing mistakes can be costly for businesses, resulting in lost credits, denied claims, and potential penalties. By following the best practices outlined in this article, you can avoid common pitfalls and ensure a successful ERTC filing.

Keep in mind the importance of proper employee classification, understanding eligibility criteria, double-checking calculations, maintaining accurate documentation, and timely filing.

Learn more with ERTC Assistance, or contact us if you'd like help with filing for ERTC claims.


What is the Employee Retention Tax Credit (ERTC)?

The ERTC is a tax incentive program designed to help businesses financially impacted by COVID-19 retain employees and maintain payroll.

How can I avoid ERTC filing mistakes?

To avoid ERTC filing mistakes, ensure proper employee classification, understand eligibility criteria, double-check calculations, maintain accurate documentation, and file on time.

How do I know if my business is eligible for the ERTC?

Your business may be eligible if it experienced a significant decline in gross receipts or was subject to a government-mandated shutdown due to COVID-19.

What documentation is needed for an ERTC claim?

Necessary documentation includes payroll records, proof of business disruption, and any other relevant documents to support your claim.

What happens if I make a mistake when filing for the ERTC?

Mistakes when filing for the ERTC can result in a reduced tax credit, denied claims, penalties, or even disqualification. It's essential to be diligent and accurate in your filing process.

How long does it take to get my ERTC refund?

While the timeframe may vary depending on IRS backlog, time of year, and the accuracy of your filing, the ERTC refund processing time may take 6-8 weeks.