How Can Business Owners Take Advantage of the Employee Retention Tax Credit (ERTC)?

When the CARES Act was passed in April 2020, the Employee Retention Credit (ERTC) was included but did not receive much attention. However, the program has undergone significant changes since December 2020, leading to a lot of confusion and misinformation among business owners. The ERTC is a program that provides up to $26,000 per employee for businesses that were impacted by the pandemic. And yes, your business probably qualifies!

Fortunately, the team at Rust Belt Business Law sat down with us to address some common misconceptions about the ERTC, and the truth behind them:

“If my business received payment under the Paycheck Protection Program (PPP), I am not eligible for ERTC.” False. You can qualify for the ERTC even if you received funds under the PPP, regardless of whether it was for Draw 1 or Draw 2.
“A business that did not qualify for PPP also does not qualify for ERTC.” False. The programs are unrelated, and you do not have to have received PPP funds to qualify for ERTC.
“A business is required to show a revenue decline in order to qualify for ERTC.” False. While a revenue decline may make it easier to qualify, there are multiple ways to demonstrate that your business was impacted by COVID-19, even if your revenue remained flat or increased.
“Only businesses that were completely shut down qualify for ERTC.” False. A complete shutdown is one way to qualify, but you may also be eligible if you had a significant revenue decline or were subject to a partial shutdown.
“Essential businesses don’t qualify.” False. The purpose of the program is to maintain employment, and being deemed essential is not a determining factor.
“Our business does not have enough income to utilize a tax credit.” False. This is a refundable tax credit, meaning the government can send you a refund check even if you cannot use the entire credit. Your income is not relevant for determining eligibility.
“My business does not qualify because we had a lot of turnover and/or we haven’t maintained employee numbers.” False. You can qualify even if you had employee turnover or did not maintain the same number of employees throughout the pandemic.
“A business that increased the number of employees will not qualify.” False. You can qualify even if your business grew in the past year, and in fact, a larger headcount may entitle you to a larger tax credit.
“The PPP process was confusing for business owners and the ERTC will be equally as confusing.” This one’s actually true. The ERTC process is complex, and it is recommended to seek the help of professionals to ensure proper understanding and compliance.
“We can just have our accountant or payroll company take care of this for our business.” Many accountants may not be aware of the recent changes to the law, and it is important to seek out professionals who are knowledgeable and able to give you the best chance of qualifying. This is especially important if you ever got audited so that you have strong evidence supporting why you believe you qualify. That’s why our friends at Rust Belt Business Law are providing written opinion letters to protect you in case of an audit. They’ve also already helped more than 250 business owners claim over $250 million in ERTC credits!

Don’t Miss This Opportunity

The Employee Retention Tax Credit (ERTC) is a valuable program that can provide thousands, or even tens of thousands, of much-needed dollars to your business. But there’s a lot of misinformation about the program floating around that can prevent businesses from taking advantage of it.

Fortunately, Rust Belt Business Law has the tools and resources to help businesses navigate the complex laws and regulations surrounding the ERTC, with a proven track record of success having helped more than 250 business owners claim over $250 million in ERTC credits. We encourage all of our clients to follow this link to get more information about the program, see if they qualify, and learn how Rust Belt Business Law may be able to help them claim their share of this government program.