In this podcast episode, we discuss the recent order from the IRS to immediately stop processing new Employee Retention Tax Credit (ERTC) claims. The decision comes in response to a surge of questionable claims and concerns from tax professionals, highlighting the unacceptable risk to businesses and the tax system. IRS Commissioner Danny Werfel has announced a moratorium on new claims, effective from today until December 31, 2023.We provide insights into the complex nature of the ERTC, the risks facing businesses, and the importance of staying informed during this period. We also discuss the following:
We also provide information on ERTC Pays Partners, who will still be accepting and submitting new ERTC filings, allowing filers to be at the "front of the line" when the IRS lifts the moratorium.Stay informed about the latest ERTC news and updates by listening to our podcast episode and following the hashtags: #ERTCNews #EmployeeRetentionTaxCredit #ERTC2023 #IRSUpdate #BusinessTaxation #COVID19Relief.
Also check out ERTCPays.com for more info and a free ERTC evaluation.
Is ERTC Taxable?
No, the Employee Retention Tax Credit (ERTC) is not taxable income4. The ERTC is a refundable tax credit that rewards businesses for keeping employees during the COVID-19 pandemic[2]. It is designed to provide financial relief to eligible employers and encourage them to retain their workforce[3]. While the ERTC is not taxable, it is subject to cost disallowance laws that essentially render it taxable[4]. It's important to consult with a qualified tax professional to understand the specific tax implications and requirements related to the ERTC.
Here are some key points to understand about the ERTC:
While the ERTC provides valuable financial relief to eligible employers, it's important to be aware of potential scams and misleading information[6]. The IRS has warned about scammers taking advantage of businesses and individuals seeking to claim the ERTC[2]. To navigate the complexities of the ERTC and ensure compliance, it's advisable to consult with a qualified tax professional who can provide guidance tailored to your specific situation.
In conclusion, the Employee Retention Tax Credit (ERTC) is not taxable income. It is a refundable tax credit designed to support businesses during the COVID-19 pandemic by incentivizing employee retention. However, it's essential to understand the specific eligibility requirements, calculate the credit accurately, and consult with tax professionals to ensure compliance with IRS guidelines and avoid potential scams.
Understanding the Employee Retention Tax Credit
Beware of Scams and Consult Professionals
Is the ERTC (Employee Retention Tax Credit) Taxable? Blog
The Employee Retention Tax Credit (ERTC) is a tax credit available to eligible employers in the United States. It allows employers to claim a credit against certain employment taxes based on qualified wages paid to employees[3]. The purpose of the ERTC is to incentivize employers to retain their employees during challenging economic times, such as the COVID-19 pandemic[3].