How to know if your business qualifies for employee retention tax credit
Small businesses are facing an onslaught of ads, phone calls and emails to help them claim a pandemic-era tax credit. However, experts urge business owners to review eligibility with a qualified tax professional.
The tax break — known as the employee retention credit, or ERC — was enacted in 2020 to support small businesses during the Covid-19 pandemic, worth up to $5,000 per employee for 2020 or $28,000 per employee in 2021.
While the credit applies to tax year 2020 or 2021, business owners still have time to amend returns and claim the credit, which has sparked a flood of ads from companies offering to help.
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"The calls and solicitations are brutal," said certified financial planner Craig Hausz, CEO and managing partner at CMH Advisors in Dallas. He is also a certified public accountant. "Our clients are getting a ton of these and it's just bombarding them."
While Hausz's company has completed at least 100 amended filings for clients to claim the employee retention credit, it has also informed clients when they don't qualify.
"ERC mills" have popped up, charging small businesses up to 25% to 30% of the credit received, said Kristin Esposito, director for tax policy and advocacy for the American Institute of CPAs.
"There's a huge monetary incentive," she said.
Source: CNBC
