Over the past two and a half years, my firm has helped businesses claim over $50 million in Employee Retention Credits (ERCs) from the government. We were one of the first businesses to offer this service, and have helped thousands of businesses get the money they deserve.
The ERC is a tax credit created by the CARES Act in 2020 to help businesses keep their employees on the payroll during the COVID-19 pandemic. The credit is worth up to $26,000 per employee and can be claimed for wages paid during certain quarters in 2020 and 2021.
We have learned a few key things along the way:
- Even the savviest entrepreneur needs financial education. The tax benefits, programs, and credits available to businesses are complex and constantly changing. It can be challenging to know what you qualify for, and there is a lot of misinformation out there. That's why we offer tax planning services to our clients. We want to ensure they are getting the most out of the tax code.
- Your most trusted advisors might be wrong. It's important to be critical of the advice you receive from your accountant, CFO, or other advisors. More than 70% of the businesses we've helped with ERC claims almost didn't get their money because their accountant told them they didn't qualify. Don't take advice at face value. Ask questions and make sure you understand the basis for their recommendations.
- The IRS isn't as scary as you think. The IRS is often seen as a monster, but it's not that bad. As long as you're not intentionally doing anything fraudulent, the chances of your business getting shut down or you going to jail are very slim. The IRS just wants to make sure that everyone is paying their fair share of taxes.
On a personal note, I learned that to scale a new area of your business, you need to review your systems and processes every 90 days at least. If you do that, you can grow like crazy — which is what we did with our ERC work. Now, even the big national companies call us for claims processing help, which is a lesson in itself.
If you want to learn more about the ERC or are wondering whether or not you qualify, download our free guide below. As I said, I'm here to educate! - Adam Williams
