A pandemic-related tax credit continues to be in the news—and the focus of IRS scrutiny. The Employee Retention Credit—or ERC—is a refundable tax credit for businesses intended to provide relief for companies that kept employees on the payroll during Covid-19. Unfortunately, it has also become a magnet for fraud.
Here’s how the ERC works. Eligible employers that paid qualified wages to some or all employees after March 12, 2020, and before January 1, 2022. Typically, to qualify, you must demonstrate that your business was shut down by a government order due to the pandemic during 2020 or the first three calendar quarters of 2021, or that you experienced a specific decline in gross receipts during the eligibility periods during 2020 or the first three calendar quarters of 2021. Some businesses may also qualify as a recovery startup business for the third or fourth quarters of 2021 (otherwise, the ERC relief was phased out by Congress for businesses for that period).
If your business was shut down or experienced the requisite decline in receipts, and you paid your employees, you may be eligible to claim the credit. The credit is 50% of up to $10,000 in wages, meaning that it can be as high as $5,000 per employee in 2020 and as high as $21,000 per employee in 2021 (totaling the $26,000 per employee that is regularly touted).
The ERC is available to most kinds of businesses, including tax-exempt businesses. It is not available to individuals, including freelancers...
The lawsuit alleges the CCRB’s online database, 50-a.org, unfairly harms officers by listing serious accusations including sexual misconduct, racial profiling and making false official statements ...