Yes. Any Eligible Employer may elect not to apply the Employee Retention Credit for any calendar quarter by not claiming the credit on the employer’s employment tax return.
Yes. If an Eligible Employer elected not to claim the Employee Retention Credit in one calendar quarter, the Eligible Employer is not prohibited from claiming the credit in a subsequent calendar quarter for qualified wages paid in that subsequent quarter provided it meets the requirements to claim the credit. In addition, an Eligible Employer can file a claim for refund and make an interest-free adjustment for a prior quarter to claim the Employee Retention Credit to which it was entitled in a prior quarter, following the rules and procedures for making such claims or adjustments. See the instructions to Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund. However, qualified wages paid during the first quarter of 2020 should be reported on the employer’s second quarter Form 941, Employer’s Quarterly Tax Return. Therefore, an employer should not file a Form 941-X to make an adjustment for qualified wages paid during the first quarter of 2020. See How does an Eligible Employer report qualified wages paid in the first quarter of 2020?
Example: Employer H paid qualified wages during the second quarter of 2020 but did not claim an Employee Retention Credit on its second quarter 2020 Form 941, Employer’s Quarterly Tax Return. If Employer H subsequently decides to claim the credit for the second quarter of 2020, Employer H should file a Form 941-X within the appropriate timeframe to make an adjustment. Employer H should not use its third quarter 2020 Form 941 to claim an Employee Retention Credit for qualified wages paid in the second quarter of 2020.