The employee retention tax credit was created for businesses affected by the Covid-19 pandemic. Here's what to know before amending tax returns to claim it.
, with "less than 50% of gross receipts," compared with the same calendar quarter in 2019. For 2021, the revenue thresholds dropped to "less than 80% of the same quarter" in 2019.
"We've done some for clients that had shutdowns, and we've done some that had revenue decreases," which is easier to calculate, Hausz said. Further, the credit was expanded from 2020 to 2021, originally covering 50% of qualified wages , for a maximum credit of $5,000 per employee in 2020. For 2021, the credit jumped to 70% of wages , worth up to $7,000 per quarter or $28,000 per year.One of the difficulties of retroactively claiming the employee retention credit is business owners also must amend other returns, Esposito said.
Hausz said the "big issue" with newer companies claiming to help businesses get this single credit is that they might not sign the amended returns, in order to skirt future liability. "Do not file this unless the people helping you are willing to put their name on the filing as the paid preparer," he warned.
Hausz added that taxpayers should "go talk to a qualified professional," such as a CPA, enrolled agent, tax attorney or financial advisor. "There are literally hundreds of firms that I know personally that would do the credit and sign their name on it."
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