Thinking About Taking the Employee Retention Credit? Be Ready to Defend Your Positions
Tax professionals expect ERC claims to be a significant target for IRS audits over the next few years. The IRS has announced it is training 300 agents for civil and criminal investigations regarding ERC claims. Federal grand juries have already returned at least 10 criminal indictments related to improper ERC claims.
IRS Renews Warnings on Aggressive Employee Retention Credit Claims
Last week, the IRS issued a renewed warning urging business owners to carefully review the Employee Retention Credit (ERC) guidelines before filing claims.
New Safe Harbor for ERC Gross Receipts Calculation
This month, the IRS announced a new safe harbor provision that allows employers to exclude certain amounts received from other pandemic relief programs in determining whether it qualifies for the Employee Retention Credit (ERC) based on a decline in gross receipts.
COVID-19’s Lasting Effects on Nonprofits – Relief Programs
The American Rescue Plan Act of 2021 made many large nonprofit organizations eligible to apply for PPP loans for the first time. The legislation also provided new or extended employment-related programs (such as the Employee Retention Credit) and allocated federal funding for many programs championed by nonprofits, such as childcare, arts and humanities, food assistance and services for the homeless.
Maximizing the Employee Retention Credit
The ERC is a refundable payroll tax credit for qualified wages paid to employees of businesses dealing with a significant decline in gross receipts and/or closed or running limited operations because of government-mandated pandemic restrictions.
Under the Act, employers can receive a maximum credit of $14,000 per employee for the first two quarters of 2021.