January Credible Update

Upcoming Webinar - Understanding the GA RTC & the IRS ERC Update

Join us for our monthly CPE series, Credible Conversations on January 18 at 2pm. This 50-minute training will dive deep into state tax credits that some of your clients may qualify for. We will also cover the latest updates from the IRS about the ERC. Click below for more information on our next series or to watch our December course on the Georgia Jobs Credit.

January ERC Update

CPAs and tax professionals - are your clients asking if they should return their ERC money?

The IRS is offering companies the ability to refund the employee retention tax credit that they took if they feel that it was improper while avoiding civil penalties and also having to take the 280C adjustment. In fact, they are able to refund 80% of the credit that they received, and they are not going to face civil penalties. They will not have to take a 280C adjustment for the remaining 20%.

But the question is, did they really qualify?

If they qualify, there is no reason for them to be returning that money.

So as you're doing your year-end tax planning, or you're in the midst of doing the tax preparation, there are five questions that I need you to ask in order to protect your clients properly.

1. Did they apply for the employee retention tax credit?

2. If they did, how did they qualify, and what was the basis of qualification? If they tell you supply-chain disruption or OSHA, then you know that's not going to be a legitimate claim.
3. The third thing that you need to understand is what periods in which they qualified. A lot of the bad actors were qualifying companies for all six quarters. My experience has been very few qualified for all six quarters. So right away, if it's all six quarters, you should be suspect of that.

The basis of qualification is really important because whether it's governmental orders, gross receipts, or a recovery start-up business, those periods are very different.

4. Who prepared the employee retention tax credit for them, and are they still in business? A lot of ERC companies are no longer in business. As soon as the IRS put the moratorium in place in September of 2023, a lot of the bad actors in this space got out, and they stopped doing it. Find out if you know the company they used is still in business.
5. Most importantly, what kind of support did the service provider give to your client supporting the employee retention tax credit calculation and claim? The IRS is really clear as to what's needed for substantiation purposes. Look at the deliverable and verify how it was calculated.

There are two easy fixes here:

1. One you can go through and review it or you can contact us at TaxCredible and for a small fee, we will take a look at the the basis for qualification and be able to give you the information you need to properly give your client guidance as to whether or not the 280C claims should be refunded.
2. Use our guide: How to avoid an ERC scam; it's so important. It's something you can share with your clients so that they understand what's going on, how you can protect them, and what they may need to do. 

Remember, before you start the process of returning the money to the IRS, make sure you ask these five questions to your clients this tax season.

TaxCredible Software Update

A new Quick Send feature was added to the CPA view, which allows you to easily send out TaxCredible incentivizers with just a click of a button.  Watch the tutorial below for further details:

A link is now created when you send an incentivizer so that you can help your clients complete their tax credit questionnaire successfully.

We understand the importance of serving your clients, and TaxCredible is always here to support you. If you have any queries or would like to discover the benefits of our latest software in saving you time with tax incentives, please don't hesitate to contact us.