Beware Employee Retention Credit Schemes

If you own a small business, or even if you don't, you may be getting a lot of solicitations advising you that you may qualify for the Employee Retention Tax Credit (ERTC). Be wary of these "ERC Shops" that may advise you to claim the credit when you may not qualify. These third parties often charge large upfront fees or a fee that is contingent on the amount of the refund and may not inform taxpayers that wage deductions claimed on the business' federal income tax return must be reduced by the amount of the credit. Businesses are encouraged to be cautious of advertised schemes and direct solicitations promising tax savings that are too good to be true. Taxpayers are always responsible for the information reported on their tax returns. Improperly claiming the ERTC could result in taxpayers being required to repay the credit along with penalties and interest, and chances are that by the time that auditor comes around, those ERC Shops will be nowhere to be found. If you think you may qualify for a tax credit, discuss it with a qualified professional like your CPA.