Clients Having Success Reassessing Employee Retention Credit

Posted on August 23, 2022December 18, 2023

Many of AAFCPAs’ clients are having success reassessing their eligibility for the Employee Retention Tax Credit.

“IRS anticipates that approximately 70%-80% of small and medium businesses (as well as tens of thousands of charities) were good candidates for taking the ERC,” according to Forbes.com. “The reality is, to date the actual numbers of businesses and charities applying for the ERC is far below that. Small and medium businesses (as well as tax-exempts/charities) are leaving billions of dollars on the table.”

If you have not yet reassessed your eligibility, AAFCPAs urges you to review some of these resources:

WHAT IS THE CREDIT VALUE?

In 2020 the credit value was up to $5,000 per employee, and in 2021 it was up to $7,000 per employee per quarter. A company with 20 employees could be looking at as much as $100,000 in 2020 and $140,000 per quarter in 2021, for a combined total of up to $520,000- in credits (so long as the organization qualifies for all quarters).

WHAT DOES AAFCPAS ADVISE?

AAFCPAs recommends that eligible companies file as soon as practical to prevent further delays with your credits. The IRS is currently projecting that processing times could take up to a year.

As with all tax credits, there are significant rules and potential pitfalls. If you have any questions about how these provisions affect your organization, please contact Courtney McFarland, CPA, MSA, at 774.512.4051, cmcfarland@nullaafcpa.com; or your AAFCPAs Partner.

About the Author

Courtney McFarland, CPA, MSA, 340B ACE

Courtney is an audit & consulting partner in the firm’s Healthcare Practice with extensive experience advising the nation's healthcare safety net community, including Federally Qualified Heath Centers (FQHCs), clinics, and behavioral health providers. She delivers a full range of solutions solving the challenges that AAFCPAs’ healthcare clients face, including: audits in accordance with Uniform Guidance/Single Audit and Government Auditing Standards, 340B pharmacy program requirements, best practices for reconciliation & analysis of statistical and programmatic data, …

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