Have you applied for the Employee Retention Credit (ERC)? If not, you may be missing out on a completely refundable tax credit to help your business bounce back from the pandemic. The ERC was created to reward businesses that kept employees on the payroll during the pandemic and has been changed and amended several times, making the credit easier than ever to qualify for. Filing for the ERC can be daunting so follow these six tips to minimize your frustration and maximize your credit!
Don’t Estimate Your Potential Credit Amount
While it may be tempting to sit down and calculate how much you think your business is due through ERC, we don’t recommend it. Not only could it lead to heartbreak once you go through the official qualification process, but it could also tempt you to file for more than you are actually eligible for, which could end in an audit from the IRS. Don’t put the cart before the horse – leverage a tenured team of tax specialists that can help you navigate the qualification process and make sure that you are claiming the amount you truly deserve.
Be Up to Date on Recent Updates to the ERC Program
The ERC has gone through several changes since its introduction in the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020. For example, did you know that you could be eligible for the ERC even if you also received Paycheck Protection Program (PPP) loan forgiveness? This wasn’t true until the Taxpayer Certainty and Disaster Relief Act of 2020 (Relief Act) made it so. The program was also expanded to provide much-needed relief to even more businesses.
Even if you don’t think you could qualify for the program, reaching out to a team of knowledgeable tax specialists could prove otherwise. You can also check out our blogs to read more about the ERC and the most recent updates.
Don’t Try to Double Dip
Thanks to the Relief Act, which was mentioned above, businesses that received PPP loan forgiveness can now also be eligible to receive ERC, but as with most things from the IRS, it comes with a caveat. Wages used to receive PPP loan forgiveness can not be claimed as qualified wages for the ERC. Doing so puts your filing out of compliance which could open your business up to the much-dreaded IRS audit, additional legal and tax specialist costs, and a mandatory return of credit funds. Save yourself the headache and choose to file with a solutions provider that prioritizes compliance throughout the entire process.
Fill Out the Proper Forms
Even though the ERC program ended in September of 2021, qualifying businesses have up to three years to retroactively claim the tax credit! To do so, businesses need to file an amended payroll tax return using Form 941-X.
Document, Document, Document
Compliance is the song that never ends at Stenson Tamaddon because we believe it is truly critical to protecting your business against unfavorable findings from an IRS investigation. Keeping adequate records and documentation from your tax filings is an important safeguard.
File with a Firm that Prioritizes Compliance
Navigating relief programs can be confusing and daunting and will often leave you with more questions than answers. It is important to file with a knowledgeable firm to ensure that your business is in good hands. At Stenson Tamaddon, our specialists have extensive knowledge in finance and assisting businesses of all sizes. We are here to make the filing process as quick and painless as possible so that your day-to-day life isn’t interrupted. Stenson Tamaddon uses compliance-based technology to ensure that you have the peace of mind that your important documents are being handled correctly and with care. We know that time is money, so let us tackle the hard part. We’ll proactively guide you through the process. Reach out to our team of specialists today to get started and put money back in your wallet.