Debunking Common Misconceptions Around The Employee Retention Tax Credit

In the business world, misconceptions can often cloud our understanding of crucial support programs like the Employee Retention Tax Credit (ERTC).

This credit is especially relevant for small businesses grappling with post-pandemic economic hurdles.

So, let's take a moment to debunk some common myths and misconceptions surrounding the Employee Retention Tax Credit.

Myth 1: ERTC - Only for Completely Shut Down Businesses

Let's start with a common one.

Many believe that the Employee Retention Tax Credit is solely for businesses forced to halt operations entirely due to pandemic restrictions.

That's not the case.

While completely shut-down enterprises are eligible, companies facing partial shutdowns or significant revenue declines can also benefit from this tax credit.

Myth 2: ERTC - A Safety Net for Revenue Losses Only

Another popular misconception is that only businesses experiencing significant revenue declines can qualify for the ERTC.

While diminished earnings do play an integral role in establishing eligibility, they are not the exclusive criterion.

Firms encountering issues such as supply chain disruptions, capacity limitations, or government orders impacting operations may also qualify.

Myth 3: ERTC - A Loan that Requires Repayment

An understandable but misplaced belief is that ERTC behaves like a loan needing repayment at some point.

On the contrary, it's a tax credit aiming to offer financial aid to businesses maintaining their staff through challenging times.

If eligible, companies can claim this credit against their payroll taxes due or get refunds if their tax liabilities are exceeded by credits earned.

Myth 4: Startups and New Businesses are Excluded

A common myth suggests startups and new ventures established after February 15th, 2020 cannot avail of ERTC benefits — an entirely unfounded notion. The fact remains that even startups might be eligible based on factors such as significant revenue declines or major disruptions due to the pandemic.

Myth 5: Recovered Businesses Aren't Eligible

Businesses that have witnessed recovery in their overall revenues often assume they're ineligible for the ERTC.

However, firms that experienced downturns during specific quarters or faced considerable disruptions may still qualify.

Special 'safe harbor' provisions allow certain businesses to qualify under these circumstances.

Myth 6: The Complexity of ERTC is Overwhelming

The misconception that navigating the ERTC application process is complicated and burdensome discourages many.

Yes, attention to detail is required, but this isn't an insurmountable task. By seeking assistance from informed accountants or tax consultants, the process can be simplified significantly.

Myth 7: ERTC Benefits are Limited and One-time Only

Some believe the ERTC is a one-time benefit with minimal impact on their financial bottom line.

The reality is different. Thanks to various legislative acts extending and expanding its scope, eligible businesses can claim credits for multiple quarters, potentially leading to substantial financial benefits.

Download our Special Report: Guide To The Employee Retention Tax Credit for everything you need to know about the Employee Retention Tax Credit.

For an extra layer of preparedness, grab our Essential Checklist: 16 Factors To Consider When Selecting An Employee Retention Tax Credit Professional here.

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To date, we've aided over 19,000 businesses file successful claims resulting in $1.3 billion in refunds impacting more than 401K eligible employees.

Don't let misconceptions hold you back from reaping benefits designed specifically for you.

Begin today with your refund estimate at www.GetERTC.win and stay ahead of the curve.