Beware of Employee Retention Credit Scams

        The Employee Retention Credit (ERC) is a tax credit for employers who kept paying employees while closed by government order or had a great decrease in income due to COVID-19. This is a credit that can only be claimed by certain businesses and organizations that had employees during specific time periods. With this set of criteria, the ERC is continuing to be the subject of a growing advertising campaign. Wild claims are being made about who can qualify for it.

          The eligibility requirements should be considered closely. One sign of a scam is stating that the application process is easy, or that someone can find out if they are eligible for it in minutes. The ERC is noted for being a very complex credit. Scammers are trying to use this situation to steal personal information or run away with large upfront fees for work that will never take place. Dishonest promoters try to lure in victims by offering to work for a fee based on a percentage of the credit or saying that the business has nothing to lose.

          Anyone who receives an ERC that does not truly qualify for it, will have to pay back the full amount, plus penalties and interest. That is a lot to lose for a small business. The best way to find out if a tax credit applies to you is to talk to your trusted and qualified tax professional.

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