Trusted Guidance for the Employee Retention Credit and the Self Employed Tax Credit
When you know better, you do better.
OneBridge Advisors in a consulting group in Richmond, VA that provides professional guidance on tax credits and other financial opportunities that are often overlooked. Current examples of this include the Employee Retention Credit (ERC) and the Self Employed Tax Credit (SETC).
“Businesses should seek out a trusted tax professional who actually understands the complex ERC rules…”
-IRS Commissioner Danny Werfel, September 14, 2023
We only recommend professional firms that are under the counsel of tax attorneys and have third-party CPAs who sign the filings. The firms we recommend for ERC have the highest standards possible for compliance, accuracy, and documentation.
On September 14, 2023, the IRS published the ERC Eligibility Checklist and an FAQ section to make it easier for taxpayers to determine their eligibility for ERC.
OneBridge Advisors™ is pleased to provide our document, ERC Eligibility Simplified, which combines these two tools to help employers more quickly and accurately assess if they are a good candidate for ERC.
Self-Employed Tax Credit
Are you self-employed, a gig worker, a freelancer, a minister, or a business owner who pays self-employment taxes? You may be eligible for the self-employed tax credit (from 2020-2021) up to $32,220.
- Takes 5 minutes to calculate.
- This is a tax refund, not a loan.
- No upfront fees.
- Receive the money within 15 days.
- Use however you want.
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Meet OneBridge Senior Consultant, Dean Francis
"The biggest mistake people make about ERC and SETC is expecting their accountant to fully and accurately know about them. It's impossible for any professional to know everything about everything in their related industry. Our diligent research enables us to connect people to trusted, reputable experts in specialized areas, such as Covid-related tax credits, who can ensure compliance and maximize significant value that is often overlooked. -Dean Francis, 2/29/24
The firms we recommend for ERC have the highest standards possible for compliance, accuracy, and documentation. Their proven experience is unmatched in this space.
CREDITS CLAIMED
CLIENTS
How We Have Helped
How ERC Works
We help guide you through the process.
Common Misconceptions About ERC
“The ERC is a misunderstood tax benefit – with small and medium business owners and managers of charities either not knowing about the ERC or being wrong (or more likely outdated) about what they do know.” – Forbes February 15, 2022
“ERC is an eligibility matrix.” Bloomberg Tax August 10, 2022.
ERC is complex. A significant decline in gross revenue is only one way to qualify. There are 200 pages of legislation and 165 pages of IRS guidance. In most cases, it’s best to retain a CPA firm that specializes exclusively in ERC to make this determination
This was changed by the Consolidated Appropriations Act that went into effect in 2021.
“ERC is an eligibility matrix.” Bloomberg Tax August 10, 2022.
ERC is complex. IRS Notice 2021-20 expands the definition of “partial suspension” to include factors beyond closing your doors. In most cases, it’s best to retain a CPA firm that specializes exclusively in ERC to make this determination
Unfortunately not. There has to be a nominal impact that was caused directly or indirectly by a Covid-19 government ordinance.
This is true only if you don’t follow the rules and document it. This is another reason why we recommend a specialty CPA firm with tax attorneys and CPAs who specialize in this tax credit and guarantee their work. You can review the submission package prior to it being submitted to the IRS with your tax advisor as an extra “double-check.”
The IRS has warned twice as of May 2023 to beware of 3rd party solicitations that seem ‘too good to be true.’ The IRS reminds taxpayers that they are responsible for all IRS filings. Similar to PPP loans and Social Security claims, there are always schemes and frauds. Rightfully so, the IRS is concerned by the number of seemingly unqualified companies now advertising for ERC. Creating more confusion, these companies are mimicking specialty CPA firms that use a contingency fee model to do this work. To read the IRS’ most recent warning, you can read it here: https://www.irs.gov/newsroom/irs-issues-renewed-warning-on-employee-retention-credit-claims-false-claims-generate-compliance-risk-for-people-and-businesses-claiming-credit-improperly
There is definitely some truth to this, but it’s unlikely it applies to you. If you speak to someone who is a true expert on both the legislation and the IRS guidance, they will tell you there are some conflicts. The biggest issue is regarding a ‘lack of demand’. There is language in the legislation that opens the door to making a claim for this credit due to a lack of demand for your product or service that was caused by the pandemic. For example, consumers had to stay at home in some areas. However, the IRS Guidance says that consumers being required to stay at home is NOT sufficient to make this claim.
In the event of an audit, it’s quite possible an IRS examiner could disallow a filing made under ‘lack of demand’ for each quarter it was claimed. A tax attorney would suggest going to tax court and arguing based on the tax law created by Congress. Would he win? Some say it would just get settled for a much lower amount.
The problem with this is that few people want to risk suffering through the months of anxiety, knowing if they lose, the amount owed with penalties and interest would be painstaking.
The reason we believe that OneBridge clients do not need to worry about this is that our most recommended CPA firms steer away from this risk. They do not take positions they do not believe are clearly defensible, as they are on the hook for five years of audit assistance.
ERC FREQUENTLY ASKED QUESTIONS
The ERC is available to any employer—including non-profits, who paid W2 employees and experienced a significant decline in gross revenue, a full shutdown, or a partial disruption caused directly or indirectly by a Covid-19 government ordinance. The latter is complex and requires tax advisors who specialize in this tax credit.
An eligible employer can currently claim the ERC for qualifying wages paid from March 13, 2020 – September 30, 2021.
Businesses and non-profits that began operations after February 15, 2020, can qualify for up to $50,000 per quarter, including the 4th quarter of 2021.
You are not eligible if you do not pay W2 wages outside of owners and their family members by blood or marriage. You are not eligible if you did not experience a ‘nominal impact’ on part of your business from government mandates related to Covid-19. If you are the latter, it often takes an in-depth analysis to make this determination. There is no financial risk to do this.
Yes, if you closed temporarily but paid W2 Employees in some of the seven eligible quarters, you may qualify.
It’s hard to find anyone who will do this work for less than 5 full-time employees. However, we have a partner firm willing to do it.
Whoever owns the EIN can file for this credit. The checks are made to the entity/EIN that paid the W2 wages during 2020-2021. As an example, if a business owner sold the assets of the business (customer list, equipment, logo, etc), but retained the EIN, they can still make this claim. If your number is fewer than five, we recommend asking your accountant if you qualify for any of the quarters available under “a significant decline in gross revenue.” This is a rather simple calculation, and if you qualify under one quarter for this, you can often claim one or two more quarters after this. You can also look at the IRS website to see these rules. If you do qualify for some of the seven quarters this way, ask an accountant with ERC filing experience to help you.
If you do not qualify under gross revenue decline for any quarters and have four full-time employees, we can sometimes get an exception. The problem is that the CPA firm that does this work for you often loses money because the claim is so small.
The majority of the money to be claimed is found in the first three quarters of 2021. The more full-time employees you had then, the greater your possible claim is.
Clergy who claim the housing allowance are excluded from the employee count.
ERC IN THE NEWS
Forbes, February 2022
The Employee Retention Credit (ERC) has proven to be one of the most effective tax policies in helping small and medium businesses and tax-exempt entities weather the economic impact of the pandemic. The ERC provides employers with up to...
Forbes, December 2022
In 2021, I published a piece about the top myths regarding the Employee Retention Credit (ERC) that was preventing business owners, charity managers and Indian tribes from claiming this important tax incentive. Now, the misinformation has gone the...
Experian Employer Services, October 2022
Among the many and varied COVID relief measures instituted by the federal government, the Employee Retention Credit (the “ERC”) stands out as one of the most significant to US employers as well as one of the most complex. While the ERC has not...
ERC IN THE NEWS
Forbes, February 2022
The Employee Retention Credit (ERC) has proven to be one of the most effective tax policies in helping small and medium businesses and tax-exempt entities weather the economic impact of the pandemic...
Forbes, December 2022
In 2021, I published a piece about the top myths regarding the Employee Retention Credit (ERC) that was preventing business owners, charity managers and Indian tribes from claiming this important tax incentive...
Experian Employer Services, October 2022
Among the many and varied COVID relief measures instituted by the federal government, the Employee Retention Credit (the “ERC”) stands out as one of the most significant to US employers as well as one of the most complex....
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