Employee Retention Credit

[AlbanyConsultant]

A CPA reached out to me today to tell me that he was amending 2020 and 2021 tax filings for the Employee Retention Credit (under CARES, I think), and how would that affect the employer contributions for those years?

Basically, certain business are getting to amend COVID-era (like it was so long ago) tax returns to claim a tax credit for retaining their employees if they met certain criteria (I don't care what the criteria are since I know my business didn't qualify for it).  This increases the net income for the year - sometimes significantly - and therefore for a sole prop or partnership entity, this affects the net compensation.  Has anyone else been hearing about this?  How are you handling it (ideally with the minimal amount of disruption)?

I'm concerned that if we include it in 2022 (or 2023) based on the deposit date, then it will reduce the amount that can be contributed for the current year (or next year).  And, since the CPA is amending the 2020/2021 tax return, it would be nice (though not required) if things lined up.

Any thoughts are appreciated.  Thanks.

[DDahl]

Hi AlbanyConsulant.  Did you ever receive an answer to your post on 1/25/23 or otherwise determine the correct course?

[AlbanyConsultant]

On 12/19/2023 at 2:22 PM, Douglas Dahl said:

Hi AlbanyConsulant.  Did you ever receive an answer to your post on 1/25/23 or otherwise determine the correct course?

I had forgotten all about this; I didn't find any good answers.  I think in the one case I was discussing, they decided to not amend prior returns so it ended up being a non-issue for me.  I was happy to hear that!