What Are Pros and Cons of Payroll Providers for ERTC Filing?

Certain businesses can still claim the Employee Retention Tax Credit, also known as the ERTC/ERC, before looming deadlines. And some business owners may choose to work with other companies in order to complete their applications. But what are some of the pros and cons of using third-party companies for ERTC filings, specifically payroll providers? 

Using Third-Party Providers for ERTC

Outsourcing ERTC documentation for your business might be beneficial if you’re very busy and are overwhelmed by the thought of gathering all of that information. Or, if you’re concerned about getting all of the documentation right and avoiding the possible wrath of the IRS, working with a third-party provider like a qualified lawyer to potentially make filing easier might be your best bet.

In July, IRS Commissioner Danny Werfel said the IRS was shifting away from clearing the backlog of valid ERTC claims and being more aggressive about “increased audit and criminal investigation work on these claims.” The IRS also warned in a press release that business owners who improperly claim the ERTC will have to pay it back, “possibly with penalties and interest.”

“Businesses should seek out a trusted tax professional who actually understands the complex ERC rules,” Werfel said. 

Third-Party Payroll Providers and the ERTC

But what about specifically using a third-party payroll provider for ERTC filings? Indeed, a payroll provider or accountant can complete the Employee Retention Tax Credit for you. 

One plus of using a payroll provider for these filings is the companies are very used to dealing with taxes and payroll documentation. Their staff will be extremely familiar with the requirements and information that needs to be provided.  

Third-party payroll providers will also likely be very experienced in both keeping any payroll information you may need for your ERTC application organized and with staying up to date on any changes that may be made to regulations they need to follow. Those are additional tasks you can take off your plate as a business owner, especially when it comes to the ERTC and general payroll documentation. 

However, there are also some cons you should consider when it comes to working with a third-party payroll provider as well. 

Some payroll providers may make you sign a waiver stating that you assume the responsibility for defending your ERTC credits in the future. If they don’t provide you with the supporting documentation you need – and that the IRS will be closely scrutinizing – you could be putting yourself and your business at risk.

Instead, you may want to consider working with tax professionals who can assist you with every step of the process. Dayes Law Firm, for instance, may be able to help.

Dayes Law Firm ERTC Assistance 

The team at Dayes Law Firm can work with you on your ERTC claim from start to finish to try to avoid any potential future issues with the IRS. They can gather and verify your documentation for accuracy and eligibility and give you some peace of mind when it comes to claiming the Employee Retention Tax Credit. 

Dayes Law Firm can also assist with any necessary audit defense, too. Our firm will defend your business against an ERTC audit or if there is ever a request for an audit in the future. A third-party payroll provider may not offer the same kind of extra audit protection. 

Please contact us today for a free, no-obligation consultation about some of your options when it comes to the ERTC. Call us at (800) 503-2000 to discuss the needs of your business and how our team of tax professionals may be able to assist you more than a different third-party provider.