“Talk to me like I’m a 5th grader, please.”
The Internal Revenue Service is not renowned for relaying information in easy-to-understand terms. Trying to understand tax documents can often leave you feeling like you should have caught the bus to Law School!
The Employee Retention Credit is an especially complicated tax credit.
Some taxpayers’ claims rest partially or fully on their business suffering a more than nominal impact due to governmental mandates that restricted commerce, travel, or gathering during 2020 and/or 2021. Determining eligibility based on governmental mandates requires an understanding of the law and subsequent guidance around the ERC.
Determining if the credit is applicable necessitates comprehending the related law and the IRS guidance, which covers over 150 pages. One option for qualifying is the straightforward gross receipts test, but the other one is much more intricate and includes 71 FAQs regarding a variety of taxpayer situations.
For most business owners, wading through the details to properly calculate eligibility and take in all the tax law intricacies is not possible with their existing workload.
Our team at Tax Credit Collective has spent many hours breaking down the IRS’ memos and FAQs… so much so that we refer to scenarios presented in the FAQs in casual ERC conversations.
If you need assistance understanding the ERC, raise your hand and our team will happily guide you through it!