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Did your tax preparer say that your business wouldn’t qualify for the ERC? It could be time for a second opinion.
While your CPA may be an expert at understanding your financials, they may not have the broader knowledge needed to claim a refund for your company – including a specific grasp of ERC-related concepts like shifting tax codes and limited commerce clauses.
To be fair, understanding the ERC is pretty complex. Its official guidance is over 170 pages, and frankly, there’s a lot of work that goes into doing the calculations. But that’s where our independent team of qualified tax professionals comes in.
There’s no need for you to immerse yourself in the finer points of United States tax code. Our team of independent tax attorneys and professionals has helped thousands of small business owners like yourself claim sizable ERC refunds which they’ve used to help expand their businesses.
There are a lot of business owners who are eligible, but uninformed on the ERC. In fact, only 67% of business owners have heard of it – and 68% still have not taken advantage of it.
Keep reading to learn more about how your business might qualify for this unique tax break.
Your business is classified as a recovery startup business
According to the IRS, a recovery startup business is “an employer that began carrying on a trade or business after February 15, 2020.” Though the term ‘startup’ is used here, it’s not just limited to tech businesses. Any business in any industry could qualify as a ‘startup.’
We’ve helped startup companies in these industries and more:
Construction | Healthcare | Restaurants | Financial | Manufacturing | Agriculture | Retail
The other criteria for an eligible recovery startup:
- a.) Your annual gross receipts don’t exceed $1 million for the individual 2020 and 2021 tax years.
- b.) You have one or more W2 employees, not including owner-operators or family members.
For example, if you started a business on April 1, 2020, and brought in $654,000 for tax years 2020 and 2021, you would be considered a great candidate for the ERC. If you’re deemed a recovery startup, your business can receive an ERC credit in the amount of $7,000 per employee, per quarter.
Your business received PPP funding
Contrary to common misconception, businesses may qualify for the ERC if they have already received PPP funding. Originally, the ERC was not accessible for businesses that took part in PPP funding. This means that many employers took out PPP loans in 2020 – but skipped the ERC.
However, the program has undergone expansion, and under new rules, you can claim the ERC and PPP. This was removed by Congress in the Consolidated Appropriations Act (CAA) of 2021.
You experienced business disruption
One of the guidelines for receiving the ERC is having experienced business disruption, which is generally defined as anything that interrupts your regular business practices.
- Did you experience reduced capacity requirements due to government orders on a local, state, or national level?
- Were there capacity restrictions to your waiting rooms or customer areas?
- What about mandatory cleaning procedures that decreased business operations?
- As a provider, were you prevented from performing critical business operations?
Even a partial suspension order by the government could mean your business can potentially qualify.
You’re famous actor, Ty Burrell, and you own multiple businesses
Okay, so maybe you’re not award-winning actor, Ty Burrell. While Burrell is best known for his work on the screen, he also owns or co-owns multiple bars and restaurants in the Salt Lake City area.
Like many small business owners, Ty didn’t immediately hear about the ERC. Although he was familiar with the PPP, Burrell and his business associates needed a second opinion. Ty worked with Innovation Refunds to see if his businesses qualified for the ERC after they had received Paycheck Protection Program (PPP) funding.
Your business did not experience a decline in revenue
One of the other misconceptions is that your business had to lose money during the pandemic to claim the ERC. While this is one of the guidelines, there are other factors to determine eligibility, such as a marked decline in business activity or suspension of operations due to government orders.
However, the ERC refund is available to employers that experienced a business disruption or economic hardship due to COVID-19.
Some business owners are aware of only the reduction in revenue criterion; it is worth emphasizing here that businesses can qualify if they were shut down or experienced partially suspended operations.
Your CPA may not be a highly qualified ERC professional
A CPA does a lot of things for your business, from assisting in tax filing to answering financial questions and potentially saving your business cash flow through their recommendations. However, staying up on the latest ERC guidelines may not be their top priority. Plus, the ERC qualifications are complex, even for highly qualified CPAs.
So, that’s where we come in. Our team of independent tax attorneys can complement your CPA’s services and work with them to ensure the proper paperwork is filed. Throughout the ERC qualification process, Innovation Refunds offers several benefits, including no upfront fees, and a dedicated account executive.
Does filing the ERC affect my tax returns?
The short answer is yes. Employee Retention Credit refunds are not counted as gross income when filing your federal income tax return. That said, the amount you receive as a refund will reduce your deductions on wages and salaries – which may increase your taxable income.
Will Innovation Refunds work with my CPA to claim the ERC?
Yes, we’re happy to work with your CPA. Our team of independent tax attorneys is highly qualified and trained on complex ERC tax codes and will partner with your CPA to check if your business is qualified.
Need a second opinion on your ERC qualification status?
There are many reasons to choose Innovation Refunds as your ERC company. We make it easy for small business owners to start their claim and, if qualified, receive a tax refund that they’re eligible to receive.
Not only are we knowledgeable about the evolving legislation and regulations around the ERC, but our team of independent tax attorneys and professionals walks you through the filing process with step-by-step guidance and communication.
So, are you ready to explore your ERC eligibility? Let our independent tax attorneys determine your business eligibility, check for missing documentation, provide an accurate refund amount, and submit your claim.
*Innovation Refunds works with a team of independent tax professionals. We will share your information with these professionals to evaluate and process your claims. Innovation Refunds does not provide tax or legal advice. Terms & conditions apply.
** Ty Burrell is a paid spokesman for Innovation Refunds who also received complimentary services.