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Dispelling ERC Myths: Why Businesses Need to Pursue the Employee Retention Credit
Many businesses and nonprofits are unaware or are misinformed about their eligibility for the Employee Retention Tax Credit (ERC). Made available through the CARES Act, Congress created the ERC to provide financial relief to employers who retained employees during the Covid-19 pandemic.
If your organization is deemed eligible, it could receive up to $26,000 per W-2 employee. As a payroll tax credit, the ERC can act as a cash infusion to your bottom line allowing you to reinvest in your people and your business.
OnCentive, the nation’s leading tax credit consultancy, helps organizations navigate the complexities of the ERC. Below are some case studies to demonstrate how impactful the ERC can be for your business:
Construction Company
● 131 Employees
● OnCentive secured over $2.2 Million in refundable (cash) credits
Charter School
● 61 Employees
● OnCentive secured over $1.1 Million in refundable (cash) credits
Staffing Firm
● 4 Employees
● OnCentive secured over $98,000 in refundable (cash) credits
So how does your organization begin to pursue ERC? A business can prove ERC eligibility in one of two ways:
1) Experienced a decline in gross receipts.
OR
2) Experienced a pandemic-caused business interruption due to a government order.
While those qualifying criteria may seem clear-cut, they are not. Unfortunately, changes to the legislation and misinformation from ill-informed advisors have made it confusing for business leaders to know if their businesses are eligible and how to qualify. Let's set the record straight to dispel the most common ERC myths:
ERC Myth #1: I took PPP, so I am ineligible for ERC.
ERC Truth: PPP recipients may also qualify to receive ERC.
When the CARES Act was first enacted, employers had to decide between taking the PPP or ERC. After the Consolidated Appropriations Acts was signed into law in December 2020, employers had the opportunity to take advantage of both PPP and ERC. Whether you have taken first and/or second rounds of PPP, your business may still qualify for ERC. In fact, many of OnCentive’s clients have done so. However, you cannot count wages paid by PPP towards ERC wage calculations. That is why it is important to work with an expert like OnCentive to back-out and calculate qualified wages correctly to keep you and your business in compliance.
ERC Myth #2: I remained profitable/did not experience a decline in gross receipts during the pandemic, so I am ineligible for ERC.
ERC Truth: You can qualify for ERC without a decline in gross receipts.
Qualifying an organization based on business interruptions like shutdown orders, supply chain issues, and business suspensions are where your business needs the knowledge of OnCentive’s ERC experts. Their team conducts a full investigation into the impact the pandemic had on your business operations due to federal, state, or local government orders.
ERC Myth #3: I was not affected by a shutdown order, so I am ineligible for ERC.
ERC Truth: Just because your business’ headquarters didn't close its doors due to a local order, doesn't mean it escaped the impact of national mandates.
Often times, businesses felt the impact of the pandemic through the effect mandates had on their supply chain. OnCentive will work with your business to pinpoint how supply shortages and how shipping ports impacted your ability to operate. Their team of qualification experts will accurately document how supply chain issues impacted your business and calculate qualified wages based on those disruptions.
ERC Myth #4: My CPA said I wouldn't qualify. I don't want to waste my time and money.
ERC Truth: CPA’s often look at a business’s decline in gross receipts for eligibility and don’t have the resources to dig into operational impacts.
In fact, many CPA’s and accountants have partnered with OnCentive to qualify and file for their clients because of their leadership’s knowledge and expertise in these credits.
By choosing to work with OnCentive, you can rest easy knowing that if you are not eligible for ERC, you owe them nothing. If they find your business is eligible, they will qualify, calculate, and document impacts for eligibility and file for the credit on your behalf. Since OnCentive works on success-based fees, you owe them nothing until you receive your money from the IRS.
ERC Myth #5: I don’t have the luxury of waiting a year for the IRS to pay my ERC. I need a cash infusion now.
ERC Truth: You can receive your refundable cash credit almost immediately through OnCentive’s trusted funding partner instead of waiting months to receive it from the IRS.
Schedule a free eligibility assessment with one of the experts at OnCentive today to learn more about the ERC and our funding process.
Vanessa Tyndall
Executive Vice President of Marketing
Have Questions or Need More Information?
What Clients Say About OnCentive:
Don't just take it from us.
Morgan Akins, The Arc of Tuscaloosa
"The OnCentive team helped our non-profit raise hourly wages to attract and retain employees through a very difficult labor market. The services we provide our clients are critical to the community. Thanks to OnCentive we are able to remain competitive as an employer. Their team is great to work with and without a doubt will help you maximize the amount your organization can recover.”
Tawny DeBolt, Neon HCM
"OnCentive has delivered millions of dollars in credits to our clients. We had them take a look at our business and they found over $100k in cash refunds for our company. Their staff treats every one of our clients like they are their own and our clients and ecstatic we made the introduction."
Cliff Morgan, CFO Concrete Guys
"OnCentive has exceeded our expectations. We were skeptical on whether or not these programs would work for us but they absolutely made us believers. I would highly recommend them to any business looking to increase its profitability.”
Led by Tax Attorneys,
CPAs & Credit Experts
Our leadership has over 150 years of combined tax experience. With $3 billion in incentives captured, you are in good hands with OnCentive.
Quality Guaranteed
In the unlikely event that your credit is ever contested, the OnCentive team will defend our work and will fully refund any credits that are disallowed.
Maximum Credit Yield
Our profitability is tied with yours. We work off success fees which means we are motivated to find the maximum credits your business can qualify for.
