Back in 2020, as a means to help U.S. businesses negatively impacted by the COVID-19 Pandemic, the federal government enacted the Employee Retention Credit (ERC) which is a refundable tax credit that allows eligible businesses to offset payroll taxes. As of today, eligible taxpayers still have opportunity to receive up to $26,000 per eligible employee.
While this is definitely a great tax savings opportunity that businesses should consider, it’s critical to know that not all businesses impacted by the Pandemic can qualify for it. In fact, due to the complex qualifications and gray areas of eligibility, it is likely that ERC claims will receive heavy IRS scrutiny in the future. Even so, due to the lucrative nature of this credit, many businesses who have yet to claim it want to ensure that they are not leaving valuable tax savings on the table.
If you’re Interested in learning more about the legislative history behind the ERC, the eligibility requirements needed to claim it, or key considerations that should be taken into account before filing for it, be sure to check out this two-part series authored by TCGs Margaret Krajcer, JD, Vice President and General Counsel. The series was written for the South Carolina Association of CPAs and the articles can be accessed on the SCACPAs blog:
Part 1: https://www.scacpa.org/understanding-the-basics-behind-the-employee-retention-credit-part-1/
Part 2: https://www.scacpa.org/understanding-the-basics-behind-the-employee-retention-credit-part-2/