Trusted Guidance On The Employee Retention Credit
Don't think you qualify, or you already filed? You might be surprised.
"Small and medium businesses are leaving billions of dollars on the table."
-Forbes, February 2022
“The Internal Revenue Service urges employers to take advantage of the newly-extended employee retention credit, designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll.” – IRS.gov, January 2021
What is ERC?
Introduced originally under the CARES Act of 2020, the Employee Retention Tax Credit (ERTC or ERC) is a substantial payroll tax refund intended to reward small to midsize nonprofits and businesses who retained W2 employees during the pandemic. This refundable tax credit can be claimed for each quarter an employer experienced more than a ‘nominal impact’ on a portion of their revenue or operations created directly or indirectly by any of the thousands of government mandates related to Covid-19 that may have limited commerce, travel, group meetings, or supply chains. An employer can also make this claim for any quarter they experienced a significant decline in gross revenue.
It is not a loan or grant, and there are no restrictions on how the employer can use the money.
OneBridge Advisors™ is a consulting group in Richmond, VA that provides professional guidance to small to midsize businesses, churches, private schools, and nonprofits on the Employee Retention Credit. OneBridge partners with highly experienced CPA firms with in-house tax attorneys and other qualified professionals who use proprietary software to optimize this claim and ensure compliance and accuracy.
Maximize Your Claim
The key to an ERC claim is retaining a highly qualified CPA firm that Specializes in ERC. A thorough analysis of all 7 eligible quarters can make a big difference in the amount of money an employer receives.
Self-Employment Tax Credit
A self-employed individual in the United States, according to the Internal Revenue Service (IRS), typically falls under one of the following categories:
- Operating a trade or business as a sole proprietor or an independent contractor.
- Being a part of a partnership engaged in a trade or business.
- Pursuing business activities independently, which includes part-time business endeavors or gig work.
The Self Employment Tax Credit is worth up to $33,200 per person.
OUR COMMITMENT
Meet OneBridge Senior Consultant, Dean Francis
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
Passion Community Church
People's Advantage FCU
Veritas School
Southern Brick
Philips Telecommunication Inc.
Daniel Cobb
Mercy Mall
Some Of The Eligibility Requirements
- Any employer who operates a business, trade, or tax-exempt organization
- For the 2020 ERC refund, employers who had less than 100 full-time employees (calculated from 2019)
- For the 2021 ERC refund, employers who had less than 500 full-time employees in 2019
Some Of The Eligibility Requirements
- Any employer who operates a business, trade, or tax-exempt organization
- For the 2020 ERC refund, employers who had less than 100 full-time employees (calculated from 2019)
- For the 2021 ERC refund, employers who had less than 500 full-time employees in 2019
HOW IT WORKS
We help guide you through the process.
Refund Amount Contributing Factors
Number of Employees
Qualifying Quarters
Hours Worked
Wages Paid
PPP & PPP2 Loans
Group Health Premiums
Government Programs
Why Retain A Tax Credit Specialty CPA Firm
There are approximately 200 pages of legislation and 165 pages of IRS guidance on the Employee Retention Credit. Due to the time commitment required to navigate its nuances, most CPAs and traditional accounting firms are unable to evaluate prospective filers beyond the simple assessment of a gross revenue decline. Much like a primary care physician refers a patient to a specialist, it is crucial most employers select a specialty CPA firm to evaluate, calculate, and file for ERC.
Much like R&D (Research and Development) tax credits, the more qualified this team is, the better your results are.
OneBridge Advisors™ ensures their recommended specialty CPA firms have…
- An independent CPA reviews and signs the filing. This CPA is not employed by the firm that prepared the filing. They operate objectively, and their signature attests to the compliance, accuracy, and supporting documentation.
- Filings meet the safe harbor guidelines found in IRS Notice 2021-20. An IRS Notice is not tax law but following its guidance protects the taxpayer.
- Marketing is predominantly by word of mouth referrals, not advertisements or cold solicitations. This means clients are being referred by other accounting firms, banks, credit unions, consulting groups, financial advisors, etc.
- Can demonstrate integrity to spend as much time as possible on every calendar quarter. This can make a large difference in the total claim amount. Many firms only qualify clients for the quarters that require minimal effort.
- PPP dollars are “exhausted” in the calculation. Less experienced firms do not do this, which reduces the claim.
- Clients are provided a qualifications report that details how each calendar quarter has been qualified, and the Covid19-related government mandates behind the impact made on the employer.
- Must take responsibility for the accuracy and compliance of the filing and maintain the supporting documentation. They will defend the filling within reason if needed. If an error is found in an audit, they will reimburse the client for any penalties and interest and refund any fees assessed on the disallowed amount.
- The client experience is excellent. Clients are given direct phone lines, not 800 numbers with extensions. Emails are responded to in a timely manner. Representatives are courteous, caring, and respectful.
- The owners of the firm are known from their past business / career efforts to have integrity and competence.
- There is good reason to believe the firm will continue in business long past the ERC filing deadlines.
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
If you have received a cold call from ‘the funding department’, you might call them back just to see what the IRS is referring to. Much like some of the online ads, they make this sound easy, and often will ask for half of the contingency fee prior to filing. It won’t take you long to realize how unprofessional and unqualified these people are. Unfortunately, there are people who do. There is nothing unusual about a contingency fee for a complex tax credit filing. If you want to pursue tax credits for Research & Development, or R&D tax credits, you would use a 3rd party tax credit accounting firm. Much like ERC, it’s very time-consuming and not everyone qualifies. If you want to be evaluated under the more detailed ‘nominal impact’ part of the ERC legislation and guidance, it often requires 50-100 hours of work from a team of experts. Tax credit specialty CPA firms do this work on contingency fees to avoid a client taking the financial risk and align themselves best with the client.
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 firm, Jorns & Associates, steers 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.
"A tax credit specialty firm can make a big difference."
- Dean Francis, CEO OneBridge™ Advisors
File with Confidence
It is crucial when choosing a company to help assist in your ERC filing, to work with an experienced, accredited team who is up to date on all ERC-related legislation and knows how to handle IRS audits if they should occur. Our recommended firms often invest 100 or more hours on each case. They back up their work with 5 years of audit protection at no cost to you and carry $1,000,000 in Errors and Omissions insurance per client. A CPA will sign your filing.
The Process
- 1. Schedule A Call To Discuss Your Possible Eligibility A qualified OneBridge Consultant will answer your questions and make sure you are taking the right steps.
- 2. Provide The Requested Information After retaining a recommended CPA firm, an onboarding specialist will assist you with collecting information to review. A relationship manager will also be available to you throughout the process.
- 3. Review Your Claim After what is often an 8 to 16 week process, you will have an opportunity to review your claim prior to filing. Once you approve, a CPA will co-sign and submit the filing for you. It can take the IRS 6 to 12 months to send your funds. The good news is they pay interest on your claim.
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.
There is no minimum, but it can be problematic if you are less than five full-time employees. Before explaining further, determine how many ‘eligible full-time employees’ you had on average during the first three quarters of 2021. You must exclude any owner with 50% or more ownership of the business and anyone related by blood or marriage to that person. If you are part of a church or ministry, you cannot claim clergy who claim the housing allowance. However, as an example, if you have two part-time employees each working 20 hours, you can add them together to be one full-time employee.
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.
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.
Let’s start with an easy example. A restaurant is ordered to shut down its in-store dining, but that same restaurant was permitted to offer drive-thru, pick-up, and/or catering. It requires more rules to define partial suspension under supply chains or other situations that limit commerce, travel, or group meetings. Much of these rules are covered in IRS Notice 2021-20, which is 102 pages. For a shorter read, here are some FAQs from the IRS website. https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-determining-when-an-employers-trade-or-business-operations-are-considered-to-be-fully-or-partially-suspended-due-to-a-governmental-order-faqs
The best place to read is IRS Notice 2021-20. https://www.irs.gov/pub/irs-drop/n-21-20.pdf You can also read IRS FAQs. https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-determining-when-an-employers-trade-or-business-operations-are-considered-to-be-fully-or-partially-suspended-due-to-a-governmental-order-faqs There is additional IRS guidance on the IRS website in addition to the legislation. The original legislation is found under section 2301 of the CARES Act, but it was revised three times after this.
The Families First Coronavirus Response Act (FFCRA), signed into law in March 2020, was designed to help companies provide paid sick leave and unemployment benefits due to COVID-19. Initially, it focused on W-2 employers. In December 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which expanded the FFCRA to include self-employed individuals, freelancers, independent contractors, and gig workers. This expansion allows them to claim tax credits for income lost due to COVID-19.
Our recommended CPA firm, Jorns & Associates, is available to help you determine if you qualify.
Time is Running Out...
In 2024, the maximum value a business can claim begins to decrease and gets smaller each quarter. Don’t wait any longer. Get started right away.
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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