Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Business Owners: Have you already filed for ERC? Was it filed correctly?

Name: Painting Business Owners: Have you already filed for ERC? Was it filed correctly?
Uploaded: 2023-12-22T15:36:52+00:00
Duration: 52 s
Channel: Daniel Honan
Description: In this short Q&A segment, Speaker A raises a concern that a painting business owner may have claimed the Employee Retention Credit (ERC) for all six…

22 Dec 2023 · 1 min

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0:52

In this short Q&A segment, Speaker A raises a concern that a painting business owner may have claimed the Employee Retention Credit (ERC) for all six eligible quarters and now received a large IRS refund check—potentially for an amount they were not entitled to. Speaker B advises a proactive corrective approach: first, engage a qualified professional such as an accountant, enrolled agent, or CPA to verify the correct credit amount; then amend the payroll tax return to reflect the accurate ERC figure and repay any excess funds received. By acting before the IRS discovers the overpayment, the business can avoid significant accuracy‑related penalties and higher interest, incurring only minimal interest for the repayment. The guidance emphasizes that prompt amendment and repayment lead to a smoother resolution and peace of mind.

Chapters

What happens if you already submitted for the ERC? You're listening to this now, you're like, oh crap, I submitted for all 6 quarters and now I'm getting a $200,000 check in the mail from the IRS, but I probably only qualified for half of it or something. What should folks do in that situation?
If they applied for more than you actually qualify, you have an opportunity to fix it. In that situation, one, I would suggest finding competent help— accountant, enrolled agent, CPA— who can help walk you through the process, make sure that you actually got your numbers right. At that point, you can amend your payroll tax return showing the proper amount of credit and paying back the excess that you received. If you do this, if you take a proactive approach and you get to it before the IRS, there may be a little bit of interest, but there won't be significant penalty. If you let the IRS catch it, then you run the risk of accuracy-related penalties, higher interest. It's much worse. If you're in that situation, be proactive, amend the return, pay back the excess, and you'll sleep better at night.