Dear Clients & Friends,
You may have received a letter from us because you have employees and our office assists you with your quarterly and/or annual payroll reporting requirements. Many business owners have been contacted, or have seen advertisements, about having a third-party calculate the Employee Retention Credit (ERC). These advertisements claim that you could qualify for tens or even hundreds of thousands of dollars in refunds. Please be aware that these advertisements can be misleading.
There are a few points that these advertisements leave out:
- The ERC was discontinued as of 09/30/2021
- The ERC was only available for the 2nd, 3rd, and 4th quarters of 2020 and the 1st, 2nd, and 3rd quarters of 2021
- To qualify, your business income must have been drastically reduced in each quarter compared to the same quarter in the prior year or
- Your business was “greatly impacted” by government restrictions due to Covid-19 (i.e., closed)
- Only wages paid that were not covered by PPP loans potentially qualify for the credit
- The IRS is on high alert for ERC fraud
- You will need to amend the tax returns for the year(s) in which you are claiming the credit for
We have received a few phone calls recently from clients inquiring about the ERC. We want to assure you that our office was very diligent in checking for and claiming the ERC for all our clients who qualified when it became available.
As always, we appreciate your continued patronage. Please contact our office if you have any questions or if you have been in contact with a third-party company regarding the ERC.
Robert G. Starkey, CPA