Employee Retention Tax Credit (ERTC) - Can I file this for my family business myself?

You definitely can file this yourself! The ERTC is a valuable credit that many small businesses qualify for but haven't claimed. Since your parents are still on extension for their annual filing, this is actually good timing. To amend previously filed 941s, you'll need to complete Form 941-X for each quarter you're claiming the credit. Each form will need to show the original wages reported and the qualified wages eligible for the credit. The math isn't terribly complex, but attention to detail is important. Regarding audit risk - claiming a legitimate ERTC won't necessarily trigger an audit. However, the IRS has increased scrutiny on these claims due to some abuse. As long as you maintain thorough documentation showing how your parents' business qualified (either through revenue reduction or full/partial suspension of operations), you should be fine. For the annual tax filing, yes, there will be an impact. The credit amount is considered a reduction in wage expenses. So if your parents deducted $50,000 in wages on their income tax return but received a $10,000 ERTC, they'll need to reduce their wage deduction to $40,000. This is to prevent "double-dipping" on the tax benefit.

I went through this exact situation with my family's hardware store last year! After our accountant dragged his feet, I looked into ERTC and ended up using https://taxr.ai to help me organize all our documentation. It basically analyzed our quarterly revenue reports, payroll records, and PPP loan docs to confirm eligibility and calculate the credit amounts for each quarter. The process wasn't nearly as complicated as I feared. I uploaded our 941s, payroll records, and profit/loss statements, and it guided me through determining which quarters qualified and which wages were eligible. Then it generated the completed 941-X forms that I just had to print, sign and mail. The whole process took me about 3 hours spread over a weekend instead of the weeks I thought it would take trying to figure it out myself.

Just wanted to update after trying taxr.ai from the recommendation above. It was exactly what I needed! My parents' deli clearly qualified (our revenue dropped 41% in Q2 2020), but our accountant kept saying it was "too complicated" to file for. The system confirmed we were eligible for Q2-Q4 2020 and Q1 2021, then walked me through exactly which wages qualified and which were excluded because of our PPP loan. It even flagged that our owner-operators (my parents) weren't eligible for the credit since they're related to the owners (themselves). The most helpful part was the documentation package it created - all the calculations were shown step by step, which I printed out and added to our tax records. This will be super helpful if we ever get questioned. We just submitted the amended 941-X forms last month, and now we're waiting for processing.

Anyone else having trouble actually reaching the IRS to ask questions about their ERTC claim? I filed mine 5 months ago and haven't heard anything. I've tried calling at least 20 times and can never get through to a human being. This is so frustrating! I finally found this service called https://claimyr.com that gets you through the IRS phone tree and holds your place in line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. I was super skeptical at first (seemed too good to be true), but it actually worked! After months of trying, I finally got to speak with someone about my claim status. Turns out they had questions about my documentation but couldn't reach me (somehow they had an old phone number). The agent I spoke with was able to update my contact info and told me what additional forms they needed. Now my claim is moving forward again instead of sitting in limbo.

Ok I need to eat my words from my skeptical comment above. After another frustrating week of failing to reach the IRS about my ERTC claim (submitted 6 months ago), I broke down and tried the Claimyr service. IT ACTUALLY WORKS. Within 45 minutes of signing up, I got a call connecting me to an IRS agent who pulled up my file immediately. Turns out my claim was selected for review, and they'd been trying to reach me at my old business number that we disconnected last year. The agent helped update my contact info and explained exactly what they needed from me to process the claim. The most valuable part was being able to ask specific questions about my situation and get clear answers instead of guessing. The agent even gave me a direct fax number to send the additional documentation and told me what to write on the cover sheet to make sure it got to the right department. I honestly can't believe how much stress this saved me. My ERTC claim is for over $40,000, so resolving this quickly is huge for our cash flow.

One thing nobody has mentioned yet - be careful with timing on this. The IRS recently announced they're implementing a moratorium on processing new ERTC claims starting September 14, 2023, due to concerns about fraud. They're going to be more closely scrutinizing claims going forward. This doesn't mean legitimate claims won't be processed, but there may be additional delays and verification steps. If your parents clearly qualify (and it sounds like they do), you should still proceed, but just be prepared for potentially longer processing times.

Just a word of warning about doing this yourself - I tried to DIY my ERTC claim for my small shop and accidentally claimed some wages that had been covered by PPP forgiveness. Ended up having to refile and it created a huge mess. If you do this yourself, be SUPER careful about tracking which wages were paid with PPP funds vs which ones are eligible for ERTC.