Employee Retention Credit looks too good to be true...is there a catch I'm missing?

OK so I'm not crazy then? Because a business owner friend told me I should be careful about "ERC mills" that promise huge refunds but actually file fraudulent claims. But it sounds like these numbers actually ARE legitimate? Also, can I apply this retroactively even though it's now 2025? I didn't claim it at the time because honestly it seemed too good to be true.

You're definitely not crazy - the numbers really were that significant for qualifying businesses. Your caution is warranted though, as there have indeed been problematic "ERC mills" that encourage businesses to claim the credit when they don't qualify. But if you genuinely experienced that 32% revenue drop compared to 2019, you're likely eligible. Yes, you can still claim this retroactively by filing the amended 941-X forms for the relevant quarters. The statute of limitations for these claims is generally three years from the date the original return was filed or two years from when the taxes were paid, whichever is later. So for 2021 quarters, you're still within the window to file in 2025, but I wouldn't wait much longer.

This sounds interesting actually. Does this service actually give you an official determination you can rely on if you get audited? Does it handle all the forms or just tell you if you qualify?

I'm super skeptical about services like this. There are so many ERC scams out there. How do you know this isn't just another one of those companies giving you false confidence to file a claim you shouldn't?

The service doesn't give an "official" determination like the IRS would, but it provides a detailed analysis report that documents how your situation meets the eligibility criteria, which would be valuable documentation if you're audited. It doesn't file forms for you - it's more about verification and documentation of your eligibility. Regarding the scam concern, I totally understand the skepticism. The difference is that legitimate services like this one analyze your actual business data against the IRS requirements rather than just pushing everyone to file. In my case, they actually flagged that one of my quarters didn't qualify, which a scam operation wouldn't have done. They're analyzing eligibility, not just processing claims for everyone regardless of qualification.

Wait, so how does this actually work? They somehow get you to the front of the IRS phone queue? I've been trying to get through about my ERC filing for a month with no luck.

This sounds like complete BS. How could some third-party service possibly get you through to the IRS faster? The IRS phone system doesn't have some secret backdoor. Sounds like a scam that takes your money and doesn't deliver anything.

It doesn't put you at the front of the queue - it basically automates the calling and waiting process. Their system keeps calling the IRS until it gets through, then it holds your place in line and calls you when an actual IRS agent picks up. So instead of you personally redialing and sitting on hold for hours, their system does that part for you. I was skeptical too at first, but it legitimately works. I think what they're doing is using an automated system that can handle hundreds of call attempts simultaneously, which is something individual callers can't do. It's not a magic backdoor - it's just automating the frustrating part of the process so you don't have to waste your day on hold.

This is exactly what I'm worried about. How detailed does the documentation need to be for proving the revenue decline was COVID-related? We definitely had a 32% drop, but how do I PROVE it was because of COVID vs other market factors? We're in manufacturing and there were supply chain issues, reduced orders, etc.

For proving COVID causation, you'll want to create a narrative document that connects specific COVID factors to your business decline. Include things like: emails from customers canceling or reducing orders citing COVID concerns, documentation of supply chain disruptions with vendor communications, any relevant COVID restrictions that affected your operations, contemporaneous business records showing canceled projects or reduced capacity. The key is showing a clear cause-and-effect relationship. Also maintain detailed quarterly revenue reports that clearly show the percentage decline from 2019 to 2021 for the same quarters. The more specific documentation you have linking COVID factors directly to your revenue decline, the stronger your position will be if audited.

My brother's construction business got audited for their ERC claim last month. They claimed about $135k total. The auditor mainly focused on two things: documentation of their revenue decline and making sure they didn't count wages that were paid with PPP funds. They had good records and passed, but the agent mentioned they're specifically targeting claims filed by third-party "ERC specialists" since they've found a lot of fraud there.