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Employee Retention Credit (ERC)

In recent times, businesses have faced unprecedented challenges, and the landscape of workforce management has evolved rapidly. To support employers during these challenging times, the government introduced the Employee Retention Credit (ERC), a valuable tax incentive aimed at encouraging businesses to retain their employees. ERC is a refundable tax credit designed to provide financial relief to eligible businesses that retained their employees during certain periods affected by the COVID-19 pandemic. Initially established under the CARES Act, the ERC has undergone modifications and extensions through subsequent legislation. It's not a loan or a grant.


To qualify for the ERC, businesses must meet specific eligibility criteria. Generally, eligible employers include those who experienced a significant decline in gross receipts or were subject to full or partial suspension of operations due to government orders. The ERC is calculated as a percentage of qualified wages paid to eligible employees. The credit percentage and wage limitations vary based on the period in question. Employers can claim up to a certain amount of qualified wages per employee for each eligible quarter.


SCAMMERS BE SCAMMIN'

Now, let's be clear, this is not a loan or grant, don't let these people fool you. This is a credit for wages you paid to W-2 employees via a legally established business. There are so many ads out there advising inaccurate information about the ERC, resulting in hundreds of thousands of fraudulent claims. Listen, whenever you see something about the IRS 'giving away money', please go to the IRS and read for yourself. So far, the IRS has sent out over 20,000 letters disallowing credit claims simply because the business wasn't legally established and there were no W-2 employees on record. I'm sure there will be more on the way as they start back processing those claims in 2024.


Luckily, the IRS is giving grace and is allowing people to withdraw their claims under the Employee Retention Credit Voluntary Disclosure Program. If I were you, and I think or know I've been scammed and am not entitled to that money, I would jump quickly at the opportunity. For more information on how to withdraw, please visit https://www.irs.gov/coronavirus/frequently-asked-questions-about-the-employee-retention-credit-voluntary-disclosure-program.


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