Beware of ERC Scams | $26,000 per employee ERC scam calls

employee ERC scam calls

Beware of ERC Scams | $26,000 per employee ERC scam calls

employee ERC scam calls

The COVID-19 pandemic has put a lot of strain on businesses around the world. Many have suffered significant financial losses, while some have found ways to exploit government assistance programs. One of these programs is the Employee Retention Credit (ERC), which has been the subject of a recent scam that has been making rounds in the United States. This scam involves fraudulent calls to businesses, claiming that they are eligible for ERC payments of up to $26,000 per employee. In this article, we will be discussing the details of the scam and how you can protect your business from falling victim to it.

Understanding the ERC

Before we dive into the scam itself, let's first understand what the ERC is. The Employee Retention Credit is a refundable tax credit that was introduced as part of the CARES Act in 2020. The credit is designed to provide financial relief to businesses that have been impacted by the pandemic. It allows eligible businesses to claim a tax credit of up to 70% of qualified wages paid to employees. The maximum credit amount is $5,000 per employee for the entire 2020 calendar year and $7,000 per employee per quarter in 2021.

The ERC Scam

Now that we have a better understanding of what the ERC is, let's talk about the scam. According to reports, scammers have been calling businesses across the country, claiming that they are eligible for ERC payments of up to $26,000 per employee. The scammers tell the business owner that they can apply for the credit by simply providing their bank account information. Once the scammers have this information, they can easily steal funds from the business's account.

It is important to note that the ERC credit amount is nowhere near $26,000 per employee. The maximum amount that eligible businesses can claim is $5,000 per employee for the entire 2020 calendar year and $7,000 per employee per quarter in 2021. Any claim that offers a higher amount is a scam.

Protecting Your Business

Now that we know what the ERC scam is, it is important to understand how you can protect your business from falling victim to it. The first and most important step is to educate yourself and your employees about the scam. Make sure everyone in your organization knows what the ERC is and how it works. Also, make it clear that any calls claiming to offer ERC payments of more than $5,000 per employee are scams.

Another way to protect your business is to be cautious of unsolicited phone calls. If someone calls claiming to offer an ERC payment, ask for their name, the name of their company, and their contact information. You should also ask for a written offer and check their company's legitimacy online. Legitimate companies should have a website and contact information that can be easily verified.

It is also important to monitor your bank accounts regularly. If you notice any unauthorized transactions, report them to your bank immediately. You should also report any suspected ERC scams to the Internal Revenue Service (IRS).

Conclusion

The ERC scam is just one of many scams that have emerged during the pandemic. It is important to remain vigilant and educate yourself and your employees about these scams. Remember that any call offering an ERC payment of more than $5,000 per employee is a scam. Be cautious of unsolicited phone calls and always verify the legitimacy of the company before providing any sensitive information. By taking these steps, you can protect your business from falling victim to the ERC scam and other similar scams.