It can be challenging for businesses and nonprofits to understand the Idaho Employee Retention Credit (ERC).
While it sounds simple on paper, the intricacies surrounding eligibility requirements, calculating accurate credit amounts, and ensuring compliance with the IRS’s guidelines make it a complex credit.
But, all is not lost! Our experienced ERC attorneys are on-hand to help you avoid the pitfalls of an ERC audit and to ensure you maximize the benefits for your Idaho-based business.
Otherwise, check out our guide for a more in-depth look into the aspects…
What is the Employee Retention Credit for small business in Idaho?
The Employee Retention Credit for small businesses in Idaho is a refundable tax credit intended to help businesses that were affected by COVID-19 and kept their employees on the payroll, despite disruptions in business operations.
The maximum tax credit is equal to 70% of qualified wages paid to employees from March 13, 2020, through December 31, 2021.
Eligibility for the Idaho ERC
With the ERC in Idaho, small businesses must have experienced either of the following relating to the COVID-19 pandemic:
- Significant decline in gross receipts, or
- Suspension of operations as a result of government orders.
Note that a “significant decline in gross receipts” is determined by comparing the current quarter to the previous quarter and should be at least a 20% decline.
Ensuring compliance and understanding the specifics of the ERC qualifications can be challenging.
Therefore, it is highly recommended that small business owners seek guidance from experienced tax attorneys or professionals who can provide expert advice and assistance in compliance.
Calculating the Idaho Employee Retention Credit subtraction
The calculation for the Idaho Employee Retention Credit subtraction considers qualified wages paid to employees during eligible quarters.
The core steps for the ERC calculation is:
- Confirm your eligibility (see guidance above)
- Check your head count for the relevant year: 100 for 2020 and 500 for 2021.
- Identify your qualifying wages: earnings subject to FICA & health plan expenses paid
- Calculate the credit amount: capped at 70% of $10,000 in qualifying wages paid
- File timely by the related quarter in 2024
Hit the button below to see our full guide in more detail!
Applying for the ERC in Idaho
To apply for the ERC in Idaho, you should start by gathering all required documentation and information to support your application.
This will then help you determine your eligibility and confirm the amount of qualifying wages paid during the necessary period.
You’d then need to make your ERC application using Form 941 and file it manually or via the Federal e-filing system.
It’s best to get your application in as soon as possible since there’s no doubt going to be a backlog of businesses trying to claim the credit; not just in Idaho, but across the US.
No matter what you do, the best thing to do when applying is to ensure you’re eligible in the first place. Doing so will mean avoiding the IRS coming down on you for a false claim!
PPP & the Idaho Employee Retention Credit
If your business received a PPP loan, you can still qualify for the Idaho Employee Retention Credit, but there's a catch.
You can't use the same wages to claim for both programs. In other words, if you used the PPP funds to pay your employees, you can't claim the ERC on those wages.
But if you had additional wages that weren't covered by the PPP, you might still be able to claim the ERC on those.
If you're considering applying for both of these benefits, make sure you check out our detailed ERC PPP guide.
Remember, these programs are here to help businesses like yours make their way through these challenging times. So, grab that lifeline and take advantage of the support available to you.
Nonprofits & the Employee Retention Credit in Idaho
As a nonprofit organization that's been affected by COVID-19, the Employee Retention Credit in Idaho can be extremely beneficial. It gives you a pat on the back for your tireless efforts in the community.
The deal with the ERC for nonprofits is the same as if you’re a small corporation in that you have to meet the same tests:
- Significant decline in revenues, or
- Forced to cease operations by a government mandate.
The credit you can claim for wages paid in 2020 or 2021 vary depending on the year:
- 2020: 50% of a maximum qualifying wages paid of $10,000 = $5,000 credit, max.
- 2021: 70% of a maximum qualifying wages paid of $10,000 = $7,000 credit, max.
Is the ERC taxable in Idaho?
No, the ERC isn't taxable in Idaho since it isn’t classed as income/revenue. Rather, it’s a credit you claim to reduce your payable taxes. However, you need to keep in mind that claiming the credit can affect your tax payable since it alters payroll deductions.
In addition, you’re going to need to report the tax credit deduction on forms 1120-S and 1065, so being versed in these and general IRS tax forms is paramount.
And so, we highly recommend you check out our detailed “is ERC taxable income” guide. If you’re still in doubt, get in touch with our team so we can advise you further.
Navigating ERC audits in the Gem State
In general, an ERC audit is triggered when the Internal Revenue Service detects red flags in your tax returns or filings. Their attention could be drawn to errors, discrepancies, or other issues.
Navigating an ERC audit in Idaho can be complex, but it's doable if you take the following steps:
- Maintain clear and detailed records
- Provide all documentation to support your claim
- Get the help of a professional ERC tax attorney.
Of course, you can completely avoid an ERC audit in Idaho if you take the following steps, although these won’t guarantee you dodge the IRS bullet:
- Review the IRS guidelines before making a claim
- Double-check your eligibility
- Use a tax professional
- Document and check your calculations
- Communicate with the IRS promptly and openly
ERC Idaho scams to be aware of
Yes, there are some ERC Idaho scams kicking around, with scammers trying to take advantage of unsuspecting businesses.
Right now, the IRS has flagged the following as the most common Employee Retention Credit scams:
- Posing as tax professionals, promising they can help you secure a larger credit or make sure you will get approved quickly.
- Demand upfront fees or personal information, only to disappear without delivering on their promises.
- Claiming to be from the IRS or an official government agency and to either get you to pay a fine or get personal information from you.
To protect yourself from the and fraudulent activities, you need to be vigilant:
- Stay informed of the official IRS guidelines
- Be skeptical of unsolicited offers
- Verify legitimacy
- Protect your personal information
- Only trust a reputed tax professional
Remember, the ERC is designed to provide financial assistance to businesses and nonprofits impacted by the pandemic. By being cautious and taking steps to protect yourself, you can ensure that you're taking full advantage of the credit while avoiding scams and fraudulent schemes.
How Brotman Law can help you
When navigating the complexities of the Employee Retention Credit in Idaho, having the guidance and expertise of a qualified tax attorney can make all the difference.
That's where Brotman Law can step in to help you effectively navigate the ERC process and ensure compliance with all applicable laws and regulations.
As an experienced ERC tax attorney firm, Brotman Law specializes in providing comprehensive guidance and assistance to businesses and nonprofits seeking to maximize their benefits under the ERC program.
Reach out to us today if you would like to leverage their expertise and get the necessary support for your ERC journey. With an ERC tax lawyer by your side, you'll have peace of mind that you're fully compliant and maximizing your benefits.
As you can see, the ERTC in Idaho requires careful attention to detail and an understanding of the eligibility criteria and documentation requirements.
But it all starts with a basic understanding of the tax credit and whether you’re eligible. From there, you can move on to your calculation, application and then employ best practices to avoid an ERC audit.
If you’re ever unsure, the best thing to do is to seek professional guidance and consider working with one of our ERC tax attorneys.
The US states we support through the ERC