Don't Miss Out On Covid Relief Tax Credits

The Employee Retention Tax Credit (ERTC) is one of the largest forms of COVID relief to be approved by Congress over the past year and a half. To give you a sense of how substantial it is, an employer with 10 employees could be eligible to receive a fully refundable credit of $330,000. That’s a check from the federal government even if the employer owes zero in taxes.

Working with CPA firms around the country, Redwood has found that around half of CPAs are unfamiliar with ERTC and most of the CPAs that are familiar with ERTC haven’t taken action on it because of the incredible complexity surrounding the calculations.?

Perhaps around 3% of CPAs are calculating the ERTC on behalf of their clients. They generally report 5-6 hours of tedious labor per client, perhaps the greatest barrier to entry is the 100 or so hours required for a CPA to master the fine details of ERTC and develop a framework to calculate this for their own clients.

The size of the tax credit has attracted interest from several pop-up companies that offer to calculate ERTC for CPAs. The problem is that it’s hard for CPAs to have confidence in a calculation which doesn’t include IRS audit-ready work papers.

The ERTC has complex interactions with the Paycheck Protection Program (PPP) loans, so Redwood Tax Specialists developed a proprietary model that ties each employee paycheck to a specific credit. The CPA can sleep well at night knowing that if there is ever an audit, they can simply send the work papers to their IRS examiner and have everything thoroughly documented. This is particularly important because ERTC is likely to be an area of high audit scrutiny for the IRS going forward, given the high dollar amounts involved and the high likelihood of errors in the ERTC computation by professionals who don’t specialize in it.

Reach out to me immediately to discuss

Call or Text Noah Katz 203-297-8800 Or send me an email [email protected]