ATLANTA — Unsolicited emails, phone calls, and online ads promoting a COVID era program providing a financial boost to businesses has many wondering if it’s legit or a scam.
Question
Is the Employee Retention Tax Credit real?
Answer
Yes, but be careful of scams.
Sources
- The Internal Revenue Service
- 11Alive Financial Expert Andrew Poulos
What we found
At the height of the pandemic, nearly 50-million people in the U.S. had to leave their jobs.
According to the Brookings Institute, an overwhelming majority the businesses that closed did reopen.
Some, however, are still looking for a financial shot in the arm.
According to the IRS, businesses can still take advantage of the Employee Retention Tax Credit by filing an amended federal payroll tax return for 2020, 2021, or both.
Businesses can also get as much as $28,000 an employee, but the IRS says only a limited number qualify.
“It’s based on revenue reduction or interruption of your business,” Poulos said. “But you have to be able to substantiate how you’re qualified.”
He adds that some of the ads circulating claim that any business can qualify, but that’s not true.
The IRS has issued warnings about Employee Retention Tax Credit scams that try to convince businesses that they qualify when they don’t.
“It’s highly likely the IRS will conduct an audit and if they find your position is not valid and that your business didn’t qualify, then you’ll have to repay those tax credits back with penalties and interest,” said Poulos.
We can verify that while the Employee Retention Tax Credit is still available to businesses harmed by the pandemic it doesn’t apply to everyone, and claiming the credit when you don’t qualify can lead to big problems.