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The IRS recently issued a bringing attention to third parties who are seemingly targeting employers who may be eligible to claim the Covid-era Employee Retention Credits.

In short, one might construe that the warning implied that there are third parties who may be encouraging employers to take “improper positions� related to eligibility and computation of the ERC.

The IRS warning goes on to state that employers should be cautious of “advertised schemes and direct solicitations� that sound too good to be true.

The ERC is a refundable tax credit made possible by the CARES Act, and the intent was to encourage businesses to keep employees on their payroll during a shutdown or when a business had a significant decline in gross receipts.

The ERC is available for periods from March 13, 2020 to September 30, 2021 for most employers, and through 12/31/21 for recovery startup businesses. However, businesses must meet certain criteria to be eligible for the ERC. In its news release warning of these “schemes�, the IRS made it clear that eligible employers must have:

• sustained a full or partial suspension of operations due to limiting commerce, travel, or group meetings due to COVID-19 during 2020 or the first three quarters of 2021,
• experienced a or a , or
• qualified as a for the third or fourth quarters of 2021.

As a reminder, employers are not eligible to claim the ERC on wages that it reported as payroll costs in obtaining PPP loan forgiveness.

For more details regarding the ERC, click .

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