Categories
News

ERC Credits vs. Amended Tax Returns: IRS Issues New Guidance

By Mark Puckett, CPA | Tax Principal 

The Top Line

On March 20, 2025, the IRS issued new guidance on how to handle Employee Retention Credit (ERC) refunds—specifically regarding whether businesses need to amend prior-year tax returns. The update provides long-awaited clarity and relief for businesses that were unsure about how to treat ERCs they received after filing their original returns.

This new guidance allows eligible businesses that did not reduce their wage expenses in the original filing year to instead report the ERC as gross income in the year the credit is received. For many small and mid-sized businesses, this is a simpler and more manageable solution that avoids the burden of filing multiple amended returns.


Breaking It Down – What the New IRS Guidance Means for Your Business

ERC Background: A Common Scenario

Many businesses have received—or are still awaiting—ERC refunds for qualified wages and benefits paid during 2020 and 2021. Historically, the IRS required these businesses to amend their original tax returns to reduce wage expenses by the amount of the ERC claimed, following guidance from Notice 2021-20 and 2021-49.

However, as time has passed, many clients have opted to include the ERC as income in the year it was received, unsure if this method would meet IRS standards. Until now, there’s been uncertainty and concern about penalties or invalidation of the ERC due to the lack of amended returns.

New IRS Guidance Brings Clarity

The IRS now confirms that filing an amended return is no longer required in this common situation.

Instead: Taxpayers who did not reduce wage expenses in the original year may report the ERC as gross income in the year the credit is received.

This aligns with the IRS’s tax benefit rule and avoids the double benefit of deducting wages and also receiving the ERC.


What You Need to Know – IRS FAQs Summarized

Q1: Should I have reduced my wage expense in the year I claimed the ERC?

A1: Yes, the IRS originally expected wage expense to be reduced in the year wages were paid or incurred. But the new guidance offers flexibility for businesses that didn’t do so.

Q2: What if I didn’t amend my return but received the ERC in a later year?

A2: You’re not required to amend the prior-year return. Instead, include the ERC amount as gross income in the year you receive the refund.

Example:
A business claimed a $700 ERC based on $1,000 in wages paid in 2021 but did not reduce wage expenses on the 2021 return. The IRS paid the ERC in 2024. The business may now include the $700 in gross income on its 2024 tax return—no need to amend 2021.

Other Considerations

If you capitalized wages or didn’t reduce your tax liability based on the overstated deduction, you may not need to report it as income but instead adjust your basis or other records accordingly.


What This Means for You

This guidance simplifies ERC compliance and answers a major open question for businesses still waiting on refunds. Instead of tracking down prior returns and preparing amendments, you can focus on current-year tax reporting.

Ask yourself:

  • Have you received ERC refunds after filing your original returns?

  • Did you include the ERC in income in the year you received it?

  • Are you unsure whether an amended return is necessary?

If the answer to any of these is yes, this new IRS position likely works in your favor.


Let’s Talk ERC Strategy

This is good news for businesses and advisors—especially those balancing multiple year-end adjustments. We’re here to help interpret the guidance and make sure your reporting is accurate and compliant.

Got questions? Let’s talk about how this affects your business.

Categories
Tax

Will IRS Staff Reductions Affect Filing My Taxes?

You might be wondering:

Will the recent IRS staff cuts impact my ability to file my taxes and get my refund on time? It’s a fair concern. With the IRS recently firing nearly 7,000 employees and shutting down 100 Taxpayer Assistance Centers (TACs)—and with reports suggesting even deeper cuts ahead—many taxpayers are left asking how this will affect their tax filing experience.

The IRS is responsible for processing millions of tax returns every year, issuing refunds, and answering taxpayer questions. With fewer employees, there’s a possibility of:

  • Longer processing times for refunds
  • More difficulty getting IRS assistance
  • Potential backlogs
  • Increased risk of errors

What Can I Do to Make Sure My Taxes Are Filed Without Delays?

The best way to avoid issues this tax season is to take action early. Here’s what you can do:

  • File as early as possible – The sooner you submit your return, the faster it will be processed.
  • Use e-filing and direct deposit – These methods are the quickest way to get your refund.
  • Double-check your return – Mistakes or missing information can slow down processing, so ensure everything is accurate.
  • Monitor your refund status – The IRS “Where’s My Refund?” tool can help you track your return.

Have Questions? Contact Your ATA Advisor.

If you have concerns about filing, refund timing, or how these IRS changes may impact you, reach out to your ATA advisor today.

Our team is here to help ensure your tax season runs smoothly—so you don’t have to worry.

Categories
News

The Impact of US Tariffs on Small Businesses:

Strategies for Navigating the Uncertainty

By James Duncan, International Tax Practice Leader

The Top Line

On Tuesday, March 4th, the Trump administration imposed 25% tariffs on goods imported from Canada and Mexico, along with an additional 10% tariff on goods from China, bringing the total tariff on Chinese imports to 20%. These tariffs have sparked retaliatory measures from other countries and ongoing diplomatic discussions, creating uncertainty in the marketplace.

Regardless of the outcome of these discussions, small businesses are already feeling the effects. Higher import costs, supply chain disruptions, and competitive pressures are just a few of the challenges emerging from these new policies. This article explores how tariffs are impacting small businesses and provides strategies to navigate this evolving landscape.

Breaking It Down – How US Tariffs Impact Small Businesses
  1. Increased Costs and Reduced Profit Margins

Tariffs function as taxes on imported goods, driving up costs for small businesses that rely on foreign materials and products.

For example, a small business specializing in pool installations may find that the cost of imported materials has increased, squeezing profit margins. Many businesses are unable to pass these additional costs on to customers entirely, forcing them to absorb the expenses or find alternative solutions.

  1. Supply Chain Disruptions

Small businesses depend on steady and predictable supply chains. However, tariffs can disrupt this flow by making imported goods more expensive or harder to obtain. Suppliers may face delays, increased costs, or even cutbacks in production, leaving businesses scrambling to find alternatives.

Finding new suppliers or shifting production locations is not always an easy fix—it can require significant time and investment.

  1. Competitive Disadvantages

Larger corporations often have the financial resources to absorb tariff-related cost increases, while small businesses operate on thinner margins. This puts them at a competitive disadvantage, as they struggle to maintain pricing and profitability.

Big companies may also have more leverage to negotiate better terms with suppliers, leaving smaller businesses struggling to keep up.

  1. Uncertainty and Planning Challenges

One of the biggest challenges small businesses face is the unpredictability of tariff policies.

  • Swift and unexpected tariff increases make it difficult for businesses to plan ahead.
  • Uncertainty around future policies makes long-term investments riskier.
  • Without clear guidance, businesses may hesitate to expand, hire, or invest in new technology.

This volatility creates a challenging environment for strategic decision-making.

Navigating the Challenges – Strategies for Small Businesses

Despite the obstacles, businesses can take proactive steps to mitigate the impact of tariffs:

  1. Diversify Suppliers
  • Source materials and products from multiple suppliers in different countries, especially those not impacted by the tariffs.
  • Reducing reliance on a single supplier minimizes risk.
  1. Negotiate with Suppliers
  • Engage in discussions with suppliers to explore discounts, better terms, or alternative supply options.
  • Strengthening supplier relationships can lead to more favorable agreements during economic uncertainty.
  1. Increase Domestic Sourcing
  • Shifting to US-based suppliers can help avoid tariffs altogether.
  • While domestic options may not always be cheaper, reducing dependency on international markets can provide stability.
  1. Pass Costs to Customers (Strategically)
  • While raising prices is not always ideal, businesses may gradually adjust pricing to offset tariff-related cost increases.
  • Transparent communication with customers about why prices are rising can help maintain trust.
  1. Improve Efficiency
  • Streamlining operations, reducing waste, and investing in automation can help cut costs elsewhere in the business.
  • Efficiency improvements can counterbalance tariff-related expenses.
  1. Financial Planning and Risk Management
  • Set aside financial reserves and explore financing options to maintain cash flow.
  • Having a contingency plan ensures businesses are prepared for unexpected tariff hikes.
  1. Collaborate with Other Businesses
  • Forming alliances with other small businesses can lead to shared resources and collective purchasing power.
  • Businesses facing similar challenges can work together on bulk purchasing agreements or advocacy efforts.
What This Means for You

Tariffs introduce uncertainty, but businesses that adapt and plan strategically will be in a stronger position to navigate these challenges.

If your small business relies on imported goods, consider assessing your exposure to tariffs and exploring cost-saving measures before they impact your bottom line.

  • Are your supply chains vulnerable?
  • Have you evaluated domestic alternatives?
  • Do you have a financial plan in place to absorb rising costs?

By taking proactive steps, businesses can minimize disruptions, protect profitability, and stay competitive despite shifting trade policies.

Preparing for the Future

The tariff landscape will continue to evolve, making flexibility and adaptability crucial for small businesses. Now is the time to assess risks, explore alternatives, and implement strategies to safeguard your business.

Looking for guidance on navigating tariffs? Schedule a 30 minute complimentary consultation with me by filling out our contact form.

Categories
News

The Hidden Costs of Inefficiency: Why Your Business Needs Automation Now

Barrett Gay, Digital Solutions Practice Leader

 The Top Line

In today’s fast-moving business environment, automation and systems integration aren’t just efficiency boosters—they’re competitive necessities. Small and mid-sized businesses (SMBs) often face challenges such as manual processes, disconnected systems, and scalability issue that slow growth and increase costs. Without the right technology in place, businesses risk inefficiencies that can limit their potential.

By integrating systems and automating workflows, companies can eliminate bottlenecks, reduce errors, and free up resources to focus on strategic growth. This article explores the key indicators that signal a need for automation and how businesses can take action to stay competitive in a digital-first world.

Breaking It Down – Recognizing the Need for Automation

 Repetitive, Manual Tasks Are Draining Time

Is your team constantly handling data entry, invoice processing, or inventory tracking? These routine tasks consume valuable time and leave little room for high-value work. Automating these processes can increase productivity and reduce labor costs.

Disconnected Systems Create Inefficiencies

If your CRM, accounting, and operations platforms don’t communicate your team likely wastes time manually transferring data between systems—leading to delays and costly errors.  Integrated systems ensure real-time data synchronization and smoother operations.

Your Business Is Struggling to Scale

As companies grow, outdated processes can’t keep up with demand.  If expansion means hiring more staff just to manage inefficiencies, automation can help scale operations without a significant increase in overhead.

Error-Prone Processes Are Hurting the Bottom Line 

Frequent mistakes in billing, reporting, or order processing create unnecessary rework and can erode customer trust.  Automated workflows minimize human error and ensure consistency across operations.

Compliance & Reporting Are Time-Consuming

Regulatory compliance and manual report generation can be overwhelming for businesses. Automation can streamline data collection, ensure compliance, and generate accurate reports in a fraction of the time.

What This Means for You

Every business’s journey to automation is unique, but the benefits are universal: increased efficiency, cost savings, and improved decision-making. Businesses that fail to modernize risk falling behind competitors who embrace digital transformation.

If your company faces bottlenecks, scalability challenges, or inefficient processes, it’s time to explore how automation and systems integration can enhance performance.

Don’t let outdated systems limit your growth—modernizing your operations today ensures agility, efficiency, and long-term success.

Ready to automate, schedule a 30 minute complimentary consultation with me by filling out our contact form.

Categories
Human Resources

Unlocking the Power of Fractional HR:

A Smart Solution for Growing Businesses

By Traci Tyler, HR Advisory Practice Leader

The Top Line

In today’s fast-paced business world, companies need agile, cost-effective HR solutions that can adapt to changing demands. Fractional HR offers top-tier expertise without the overhead of a full-time team, providing flexibility and strategic guidance for growing businesses.

Many small to mid-sized companies struggle to balance compliance, employee engagement, and workforce planning while staying focused on growth. Without proper HR support, businesses risk legal challenges, high turnover, and operational inefficiencies. Fractional HR provides the right level of support when needed, helping businesses remain compliant, attract top talent, and build a strong company culture.

This article explores the key reasons why businesses are turning to Fractional HR and how it can help drive long-term success.

Breaking It Down – Why Businesses Are Turning to Fractional HR

Specialized Expertise Without the Overhead

Gain access to HR professionals with expertise in recruitment, compliance, employee relations, and training—without hiring multiple full-time employees.

Cost-Effective & Scalable Solutions

Pay only for the services you need, whether it’s ongoing support, project-based work, or interim HR leadership. This model allows businesses to scale HR functions efficiently.

Compliance & Risk Management

Changing employment laws and regulations create compliance challenges for businesses. Fractional HR provides expert oversight to mitigate risks and avoid costly penalties.

Flexible & Customizable Support

Every business has unique HR needs. Whether you need temporary HR leadership or ongoing workforce support, Fractional HR adapts to fit your business requirements.

Enhancing Employee Experience

Strong HR functions improve retention, engagement, and workplace culture. Fractional HR provides dedicated HR support to create a better employee experience.

Strategic HR for Growth

Align HR strategies with business objectives through succession planning, leadership development, and workforce forecasting. Fractional HR ensures your people strategy supports long-term success.

Getting Started with Fractional HR Services

Step 1: Assess Your HR Needs

Determine where your company needs HR support the most. Are you struggling with compliance, hiring, employee relations, or leadership development? Identifying key HR gaps helps define which fractional services will add the most value.

Step 2: Gain Dedicated HR Leadership

Start with operational HR support and scale to strategic guidance as needed. Fractional HR provides both efficiency and expertise without the cost of a full-time hire.

Step 3: Implement & Scale as Needed

Begin with core HR functions and expand services as your business grows. Fractional HR is designed to evolve with your workforce needs, making it an ideal solution for businesses in growth mode.

What This Means for You

Every business’s HR journey is unique, but the benefits of Fractional HR are clear: enhanced compliance, cost savings, and a stronger workforce. Companies that fail to invest in flexible HR solutions may struggle to keep up with evolving workplace demands.

If your business is facing HR challenges, scalability concerns, or compliance risks, now is the time to explore how Fractional HR can provide the support you need.

Don’t let HR gaps slow your growth—investing in a strategic HR solution today ensures a more agile, efficient, and people-focused workplace.

Let’s Build a Stronger HR Strategy Together

With ATA’s Fractional HR services, you get expert leadership, cost-effective solutions, and the flexibility to scale HR as needed.

To learn more, schedule a 30 minute complimentary consultation with me by filling out our contact form.