Key Podcast Highlights
What Is the ERTC?
- The Employee Retention Tax Credit, is the pandemic era tax credit where you could apply for a credit against the payroll taxes that you paid during certain quarters of 2020 and 2021, assuming you were impacted by COVID.
- The refunds were significant and because of that a lot of bad actors got involved in the refunds, which caused the IRS to suspend the ERTC while they look into some of the claims.
What Updates Do You Need to Know About the ERTC?
- The suspension is still in effect, but it will resume in 2024 at some point.
- If you think you made a bad application for the ERTC, the IRS just announced that they are giving you the opportunity to give the money back with a 20% discount. It’s a voluntary disclosure program and it’s for businesses that claimed the ERTC in error.
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Hey everybody, this is Gene Marks and welcome to the Hartford Small Biz Ahead podcast. Special news for you if you are, have participated in the Employee Retention Tax Credit. There is new news released from the IRS just this past week, that may help you. So for starters, the Employee Retention Tax Credit, if you’re not already familiar, that was the pandemic era tax credit where you could apply for a credit against the payroll taxes that you paid during certain quarters of 2020 and 2021, assuming you were impacted by COVID. The refunds were could be significant and because of that, a lot of bad actors got involved in the refunds, which caused the IRS to suspend the Employee Retention Tax Credit. While they looked into some of these refund claims to see which ones were good and which ones were bad. That suspension is still in effect, but it will resume in 2024 at some point.
But here’s what’s really important for you. If you think that you made a bad application for the Employee Retention Tax Credit, regardless of the reason, if you’re like, “Hey, I probably shouldn’t have applied for that tax credit,” the IRS is now, they just announced that they are now giving you the opportunity to give the money back with a 20% discount. It’s a voluntary disclosure program, and it’s for businesses that claimed this Employee Retention Tax Credit in error, and you want to pay it back. The new Voluntary Disclosure Program is offering you the chance to repay credits received at a 20% discount. The idea the discount is to cover any fees you might have paid to these promoters. So here’s a few things you need to know about it. First of all, the deadline to apply is March 22nd, 2024. So you really want to make sure that you jump on it.
And even IRS Commissioner Danny Werfel said in their press release that this is a limited time offer. So you really want to make sure that you jump on that. Next, to qualify for the program, you have to provide the IRS with contact information for any advisors or tax preparers who assisted you with this erroneous claim, along with details about the services. I wouldn’t want to be those advisors, but, you gotta submit that. Now, how do you apply for this program? You file form 15435. That’s 15435. It can be submitted through the IRS’s document upload tool. So. go to the IRS site, look for Form 15435. You can use it with the document upload tool. That’s how you apply for this program. Now, you will not owe any interest or penalties if you repay 80% of this credit, upon signing the closing agreement. However, um, if you do an…
Installment plan, then interest in penalties, penalties will apply. So, just to make sure that you guys are completely familiar, if you got money back from the Employee Retention Tax Credit and you’re kind of concerned that it was done in error for any other reason, give the money back, take a 20% discount on what you give back, the IRS will see you go free and clear. If you don’t take advantage of this program and the IRS audits you, regardless if you have an outside firm that prepared this for you or some specialist, you’re still on the hook because it’s your tax returns. I mean, you can go after those tax preparers fine, but the IRS is gonna go after you because it’s your business. So if you think that it’s an error or if there’s anything wrong with it, you might wanna come clean, give the money back, take that 20% discount and move on with your life. Brand new program…
That was just announced by the IRS. Take advantage of it. Okay, I’m done. My name is Gene Marks. You have been listening to this week’s episode of the Hartford Small Biz Ahead podcast. If you need any advice or tips or help in running your business, please visit us at Small Biz Ahead or SBA.thehartford.com. By the way, it’s SmallBizAhead.com. Take care.
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