The Employee Retention Credit (ERC) is a refundable tax credit against certain employment taxes for businesses affected by the 2020 government-mandated shutdown.

You have likely seen or heard ads for companies proposing to file ERC (Earned Income Credit) applications for you, claiming you can get back $27,000 per employee. Be aware that many of those companies are scammers. Don’t take our word for it. Here’s what the IRS has to say:

Beware of Employee Retention Credit scams

The IRS continues to see third parties aggressively promoting Employee Retention Credit (ERC) schemes. In News Release IR-2023-105the IRS renewed an alert for businesses and tax exempt groups to watch out for warning signs of aggressive Employee Retention Credit marketing. 

These promoters may lie about eligibility requirements. In addition, taxpayers using these companies could be at risk of someone using the credit as a ploy to steal their identity or take a cut of the taxpayer’s improperly claimed credit. 

As for the legitimate businesses that are doing ERC filings, you should be aware that they are charging outrageous fees, typically in the range of 20-25%, which can end up costing you thousands of dollars.

PayPlus helped many of our clients successfully file and we charge a modest flat fee.

When we first announced that we would assist clients with the paperwork, you might have thought it not worth the time to determine your eligibility or the cost to have us file. But a couple of factors might have you rethinking:

·    Our clients who have applied are receiving refunds in the thousands of dollars.

·    If you are eligible in 2021 for ERC in one quarter, you are automatically eligible for the next quarter, according to a new ruling by the IRS: The alternative quarter “lookback” election allows employers with a 20% decline in gross receipts for any quarter in 2021 eligible to claim the ERC in the next quarter as well. In other words, if an employer qualifies for the ERC in 2021, it will automatically qualify for the credit for at least two quarters. This applies to 2021 return only (not 2020).  

The credit is claimed on the employer’s amended quarterly Federal Tax Return, Form 941x. PayPlus can process the tax credits for our clients. Because this requires time-consuming, manual calculations, there is a fee for this service.

Here is all the information you need to determine if you are eligible. Please note that PayPlus cannot determine your eligibility because we don’t know your business revenue. If you are eligible and would like us to complete the paperwork to file, please fill out and submit the Employee Credit Request form. We must have this form to begin the process.