The ERTC, or Employee Retention Tax Credit, provides business tax incentives for companies that struggled financially throughout the pandemic. Claiming the credit is rather straightforward for small businesses, but if you own a large business with a complicated structure, you might wonder where to begin.
Here’s how the attorneys at Dayes Law Firm can help with the ERTC for business owners, even if your business structure is complex.
Know Whether Your Business Is Eligible
If you have a complex business structure, you’ll still need to meet eligibility requirements to claim the ERTC. These requirements include:
- You had a major drop in gross receipts compared to the same calendar quarter of the previous year (at least 50% for 2020 and at least 20% for 2021).
- You partially or fully closed your business because of a government order limiting travel, commerce, or group meetings.
An ERTC consultant can calculate your gross receipts and review how government orders affected your business to let you know if you qualify.
If you started your business in the past few years, you might qualify as a recovery startup. Criteria include:
- You started your business on or after February 15, 2020
- Your annual revenue has not exceeded $1 million for the past three tax years
- You have one or more W-2 employees, excluding owner-operators and family members
If you’re still unsure of your eligibility and the claims process, you might want to consider giving Dayes Law Firm a call for an ERTC eligibility assessment.
Be Sure Not to Miss Filing Deadlines
Although the ERTC program has ended, you may still apply for the credit retroactively. You have limited time to do so, however. If you want the credit for 2020, you must apply before April 15, 2024. You have one extra year if you intend to claim the credit for 2021.
ERTC attorneys can help you calculate the eligible wages you can claim, even if you have a complex business structure, and make sure that you file all paperwork and submit evidence of eligibility on time.
How to Claim the ERTC
If you are eligible for the credit, you can claim it with Form 941-X: Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund. This form asks questions about qualified wages paid, health insurance costs that your business covered for employees, and proof of your eligibility.
Form 941-X is rather complicated, and it’s easy to make mistakes that could delay your refund if you have a complex business structure. A tax attorney can walk you through the application process to ensure that you’ve submitted it correctly the first time.
How to Avoid an Audit
IRS ERTC compliance is a necessity if you want to avoid an audit. The more complex your business structure is, the higher the chance that the IRS will review your claim.
Dayes Law Firm can warn you away from pitfalls that could cause an audit, such as:
- Applying for the credit when you’re not eligible
- Claiming wages for independent contractors
- Claiming wages that your business paid with PPP loans or Shuttered Venue Operators Grant funds
- Failing to attach proof of eligibility, such as sales records for the gross receipts test
- Working with third-party ERTC processing mills, which are notorious for filing claims even if you’re ineligible
Employee Retention Tax Credit Services From Dayes Law Firm
If you’re looking for tax credit solutions for businesses, Dayes Law Firm is here to help. Unlike professionals who don’t understand how the ERTC works, our attorneys are highly experienced in helping business owners navigate the ERTC eligibility and claims process. No matter how complicated your business structure is, we’ll help you claim your credit.
Call 800.503.2000 to speak with an experienced ERTC attorney about your claim.