Here’s what to know about employee retention tax credit claims

IRS Commissioner Daniel Werfel testifies before a Senate Finance Committee hearing on Feb. 15, 2023.

Kevin Lamarque | Reuters

As the IRS pauses on processing new claims for a pandemic-era small business tax break, some filers are in limbo as the agency works on further guidance.

The IRS on Thursday temporarily halted processing for amended payroll tax returns claiming the so-called employee retention tax credit, or ERC, which was enacted during the Covid-19 pandemic.

Worth thousands per eligible employee, the IRS said the program has triggered a flood of “questionable claims,” as a cottage industry of specialist firms has popped up and pressured small businesses to wrongly claim the tax relief.

More from Personal Finance:
IRS halts processing of a small business tax break
Does your business qualify for the employee retention credit?
House scrutinizes pandemic-era small business tax break 

“Businesses that receive ERC payments improperly face the daunting prospect of paying those back, so we urge the utmost caution,” IRS Commissioner Danny Werfel said on Thursday, urging small businesses to review claims with a qualified tax professional.

In the meantime, the IRS is working on further guidance on how to withdraw unprocessed ERC claims, along with a settlement program for small businesses who wrongly received the credit and want to pay it back.

‘There’s no need to panic’

My blanket advice is always to talk to a qualified tax professional who has filed [ERC claims] before.

Craig Hausz

CEO and managing partner at CMH Advisors

“My blanket advice is always to talk to a qualified tax professional who has filed [ERC claims] before,” said certified financial planner Craig Hausz, CEO and managing partner at CMH Advisors in Dallas. He is also a certified public accountant. 

If you received the credit and know you don’t qualify, Hausz said you should start the process of paying the money back. “I think the IRS is going to be a lot more lenient on abating penalties and interest if someone proactively sends money back,” he added.

There’s still time for a ‘valid claim’

IRS targets top earners with AI and machine learning
1. Xổ số EU Millions là gì? Mua xổ sổ EU Millions ở đâu tại Việt Nam?
2. LocoLotto
3. Làm thế nào mua xổ số Loco Lotto?
4. Top 5 giải khách hàng Loco Lotto nhận được.
5. Lý do người chơi chọn Loco Lotto
6. Mua xổ số tại Loco Lotto
7. Nhận ngay 128 tỷ đô la khi chơi Loco Lotto.
8. Giải thưởng lớn tại Loco Lotto

While the deadline for 2020 amended returns is approaching, there’s still time for legitimate ERC claims, said Kristin Esposito, director for tax policy and advocacy for the American Institute of CPAs. Small businesses have until the tax deadline in 2024 to amend 2020 returns.

“If you have a valid claim, I would still go through the calculation and have all your documentation ready,” she said. “But if it seems too good to be true, it usually is.”

New ERC claims won’t be processed until 2024 at the earliest and filers may not receive the credit until the spring or summer, according to Hausz.

1.Đầu tư chứng khoán cùng sàn Finatics
2. Sàn Finatics - điểm giao dịch chứng khoán uy tín.
3. Cách chơi chứng khoán hiệu quả tại Sàn Finatics
4. Chi phí giao dịch chứng khoán Sàn Finatics
5. Đánh giá sàn chứng khoán sàn Finatics
6. Tại sao chọn sàn Finatics> để đầu tư chứng khoán
7. Giới thiệu về sàn chứng khoán FinaTics.
8. Cách kiếm tiền tại sàn Finatics

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *