Everybody has a different motivation for getting up and working every day. For some it is a long list of expensive hobbies, others want to see the world; for me, it is my amazing family that drives me. As somebody who actively employees members of my family, I wanted to discuss family members and minors in relation to the employee retention tax credit (ERTC).
Working with family can be equal parts rewarding and challenging. When it comes to the ERTC there is an exception when it comes to family, but sadly not the one you want it to be. Family is not eligible.
Initially, the ERTC didn’t specifically exclude family members, spouses, and owners. The IRS decided to come with an update to add these exclusions as it was going against the intended spirit of the ERTC. Since employee retention is a very different matter when you start talking about family, it was thought redundant to also provide tax credits much to the dismay of many business owners.
Obviously, this isn’t going to stop many companies from trying to include spouses, minors, and ownership. Some will attempt to be covert and slide them in under the radar. Others will do their very best to make a compelling case for why including them is justified. While I can completely understand being adamant about their inclusion from a business perspective, the IRS has been very clear on this matter and they will not be approved. Definitely not worth the risk associated, and nobody wants that type of attention from the IRS!
We are always here to help optimize your financials and get you as much aid as possible; however, sometimes the best thing we can do is help you avoid getting yourself in trouble with the IRS. If you want to discuss further, or you want to see how many of your employees DO qualify then reach out today. We are here to help!
For a layman’s guide to the employee retention tax credit check out our roadmap below:
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