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CAUTION: Employee Retention Tax Credits Confusion

Many of you have been seeing and hearing various advertisements offering tax credits (refunds) of up to $26,000 per employee. These tax credits being mentioned are Employee Retention Tax Credits and they are available to you if you meet certain conditions.

Conditions for Employee Retention Tax Credits:

1. If you suffered a significant loss in your revenue stream from 2020 or 2021 compared to the same calendar quarter in 2019(*)(**).
2. If you suffered a full or partial business shut down as a result of federal, state, local or other approved governmental agency during 2020 or 2021 (*).
3. If you had a supply chain issue that affected a segment of your business that makes up 10% or more of total revenue during 2020 or 2021 (*)(***).

(*) – You must be able to document how you qualify for any one of the above-mentioned conditions, and that you did not receive any other Covid Relief Tax Benefits during the same period.
(**) – Significant loss in revenue is defined by the IRS as a 50% decrease in 2020 compared to the corresponding 2019 quarter, or 25% decrease in 2021 compared to the corresponding 2019 quarter.
(***) – General supply chain difficulties do not qualify. You must be able to document the specific supplier affected, government order restricting the supplier, and proof that these supplies or goods could not be purchased elsewhere.

If you Believe You Qualify for Employee Retention Tax Credits:

Many of the organizations making these claims indicate that they will assist you in applying for these tax credits (refunds) while charging you anywhere from 7% to 35% of the amount of which you may qualify. However, we have found in many instances they have not done the necessary due diligence to ensure you qualify for these tax credits (refunds).

If you have been contacted and have applied for Employee Retention Tax Credits, we will be glad to review your documentation and advise whether we believe you qualify for these benefits. Contact Anderson, Adkins & Company in the Augusta, Georgia area at  or 706-288-2000.

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