08/17/2023

The IRS Warns Businesses About ERTC Scams

Beware of companies hyping the ERTC

These days, the airwaves and internet are inundated with advertisements claiming that employers are missing out on the lucrative Employee Retention Tax Credit (ERTC). While some employers do indeed remain eligible if they meet certain criteria, the Internal Revenue Service (IRS) continues to caution employers about third-party scams related to the credit.

While there is nothing wrong with claiming credits to which you are entitled, those that claim the ERTC improperly could find themselves in hot water with the IRS and face cash-flow problems as a result. Here is what you need to know to reduce your risk.

ERTC in a nutshell

The ERTC is a refundable tax credit intended for employers that continued paying employees during the pandemic in 2020 and 2021. Eligible employers either 1) experienced a suspension due to governmental order, 2) experienced a significant decline in gross receipts, or 3) are considered a recovery startup business. Wages potentially eligible for this tax credit occurred between March 13, 2020, and Dec. 31, 2021. Eligible employers could receive credits worth up to $26,000 per retained employee. The credit may still be available on an amended tax return.

Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett.