Does Alaska Tax ERC Federal Credit?

Key Takeaways

• The Employee Retention Credit (ERC) is a federal tax credit that helps businesses retain employees during economic challenges.
• Alaska does not follow federal ERC tax rules, so state-level treatment may differ.
• At ERTC Express, we can help you to claim ERC for your business in Alaska. 

 

ERC Basics

The Employee Retention Credit (ERC) is a refundable payroll tax credit that was established by the U.S. government in 2020 as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It was designed to encourage employers to keep their employees on payroll during the economic downturn caused by the COVID-19 pandemic.

 

Some key points about the ERC are:

• It provides a credit against employment taxes for businesses that retained employees during the pandemic.
• The credit is worth up to $5,000 per employee for 2020 and up to $21,000 per employee for 2021 ($7,000 per employee per quarter).

 

The differences between Employee Retention Tax Credit (ERTC) in 2020 and 2021 (image courtesy of financestrategists.com).

 

Eligible employers must have either:

• Fully or partially suspended operations due to a government order limiting commerce, travel, or group meetings.
• Experienced a significant decline in gross receipts during 2020 or 2021.

 

Though the ERC was discontinued for most businesses after September 30, 2021, employers can still claim it retroactively by filing amended payroll tax returns. The deadline to submit the claim for 2021 credits is April 15, 2025. 

 

While the ERC is tax-exempt at the federal level, some states may impose a state tax on refunds. Now let’s find out if Alaska taxes the ERC credit.

 

ERTC Express: Maximize Your Employee Retention Credit (ERC)   Secure the maximum ERC refund effortlessly with ERTC Express. Our US-based CPAs specialize in ERTC claims, using a “Power of 3” system to ensure each submission is audit-ready. Typically outperforming standard claims by 40-120%, our client-centric service charges only after you receive your funds, ensuring our goals align with your success. Enjoy dedicated support and significant financial benefits with ERTC Express. Get expert help today!

 

Does Alaska Tax ERC Federal Credit?

Yes, Alaska does tax the ERC as part of its state tax regulations. Employers in Alaska can claim the ERC and the funds received can be utilized to offset their payroll tax liabilities. 

 

Any income received from the ERC must be reported as taxable income on Alaska state tax returns.

 

Employers should be aware that while claiming the ERC can provide significant financial relief, they must also account for the state tax implications of the credit when filing their taxes.

 

Choose ERTC Express for Your ERC Filing

Businesses need to consult with tax professionals to ensure compliance with both federal and state tax obligations regarding the ERC.

At ERTC Express, we specialize in helping business owners in Alaska, correctly claim their ERC. Our U.S.-based CPAs guide you through the process so you understand your eligibility and maximize your refund—up to $26,000 per employee.

 

An overview of the three-stage ERC claim process.

 

Through our “Power of 3” system, we verify your claim through three CPA teams and strengthen your audit defense. We handle all documentation, offer ongoing support, and charge no upfront fees—you pay only when you receive your funds. 

 

Let us simplify your ERC filing and help you get the most out of your refund.

 

Contact ERTC Express

 

Frequently Asked Questions (FAQ)

 

What is the Employee Retention Credit?

The Employee Retention Credit is a refundable tax credit for eligible employers that kept employees on the payroll during the pandemic. The credit applies to specific wages and health insurance costs paid to employees.

 

What are the deadlines for filing for the ERC?

The deadlines for filing Employee Retention Credit (ERC) claims are April 15, 2024, for 2020 credits and April 15, 2025, for 2021 credits.

 

How do I claim ERC for my business?

To claim the ERC, you must file Form 941-X (Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund) for the specific quarters you are claiming the credit. This form allows you to adjust your previously filed Form 941 to reflect the ERC.