Can Individual Taxpayers Claim the Employee Retention Credit if They Kept Working? 

 December 6, 2023

By  Jace W Campbell, CPA

erc for individuals

The Employee Retention Tax Credit (ERTC) is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021… Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. Also, if the employer’s employment tax deposits are not sufficient to cover the credit, the employer may get an advance payment from the IRS.

The ERTC is a mechanism introduced by the U.S government under the CARES Act in response to COVID-19… It serves as a means for businesses suffering financial hardship during this period to keep their employees on payroll.

How to Qualify for ERTC: A Closer Look

Navigating the waters of Employee Retention Tax Credit (ERTC) qualification can indeed be intricate… However, understanding the key eligibility conditions could simplify the process. The primary qualifications revolve around business suspension due to COVID-19 and a significant drop in gross receipts.

How Confident Are You In Your ERTC Eligibility?

Watch Our Video Explaining the Fraud We’ve Seen From National ERC Promoters

Business Suspension Due to COVID-19

The first qualifying condition requires businesses to demonstrate that their operations were either fully or partially suspended as a result of government orders related to COVID-19… An important clarification from recent IRS Notices is that even essential businesses may qualify if they had to significantly modify their operations in response to a governmental order. These modifications must have more than a nominal impact on the business.

However, what does ‘more than nominal’ mean? It’s essentially a level of impact that’s not insignificant or trivial. For example, if you had to reduce your operating hours or limit customer access drastically, this could be considered more than nominal.

Significant Decline in Gross Receipts

The second condition involves showing a substantial decline in gross receipts… Specifically, this refers to experiencing a drop of more than 50% when compared with the same quarter in the previous year.

While these conditions give us a broad outline for ERTC eligibility, it’s crucial to remember each taxpayer’s situation is different… Even businesses subjected to identical government orders might have differing circumstances affecting their eligibility.

Analyzing Your Unique Situation

Determining whether you qualify for ERTC should ideally involve an analysis of your unique facts and circumstances… One useful benchmark we at JWC ERTC Advisory CPA consider with our clients is assessing their ability to serve customers at pre-pandemic levels.

If your ability has been significantly impaired due to COVID-related restrictions or changes, you could potentially qualify for ERTC… However, this isn’t a blanket rule and needs careful consideration within each specific context.

In conclusion, understanding ERTC qualification is a nuanced process requiring a deep dive into individual circumstances… Consulting with experienced advisors like us at JWC ERTC Advisory CPA can help ensure you make informed decisions, avoid unnecessary risks, and potentially maximize your credit benefit.

The Reality of ERTC Misrepresentation

There have been reports of firms using misinformation and deception tactics to entice businesses into signing up for their ERTC services… This includes claims such as guaranteed qualification or inflated potential credits. Be wary – each case is unique and should be analyzed individually based on its specific circumstances.

Read more: How Do Employee Retention Credits Work?

JWC ERTC Advisory CPA: Your Trusted Partner

At JWC ERTC Advisory CPA, we believe that it’s important you understand what you’re signing up for… We want our clients well-informed about both potential gains and any inherent risks associated with filing for these credits.

We offer an independent eligibility review for taxpayers who have previously filed for ERTC and have questions or are skeptical about their qualification… It’s your business, your money, and you should be certain about these claims.

How We’re Different

JWC ERTC Advisory CPA distinguishes itself from other ERC firms by the depth of our knowledge, our integrity, and our commitment to client satisfaction… We don’t make inflated promises. Instead, we give you a clear understanding of what to expect, leaving no room for unwelcome surprises.

The IRS Crackdown on ERC Promoters

The IRS is not oblivious to the misinformation being circulated by some ERC promoters… In recent times, they’ve increased efforts to clamp down on these fraudulent activities surrounding the ERTC program. This is yet another reason why working with a trusted advisor like JWC ERTC Advisory CPA becomes imperative.

Read more: Is Employee Retention Credit Taxable?

Overcoming Fear and Uncertainty

The fear of making costly mistakes or getting entangled in IRS audits can be daunting… However, JWC ERTC Advisory CPA provides guidance that alleviates these fears. We help you navigate the complexities of ERTC, giving you peace of mind and confidence in your decisions.

The Gain Perspective

Working with JWC ERTC Advisory CPA also comes with substantial benefits… Not only do we assist in ensuring you’re qualified before filing a claim but we also aid in maximizing the amount you can potentially receive under the program. Our expertise and personalized approach mean that we are always looking out for your best interest.

Remember: You’re ultimately responsible for any tax credit claims filed under your business name… Don’t let yourself be swayed by unscrupulous “experts”. Take control of your financial future – choose knowledge, choose transparency, choose JWC ERTC Advisory CPA.

Jace W Campbell, CPA

Jace founded JWC ERTC Advisory CPA in March 2021 as the nation's first and only public accounting firm focused solely on ERC . . . and nothing else. He has personally signed over 9,000 ERTC claims and is proud to be executing these claims conservatively, and how intended by Congress.

He has a passion for educating clients so they can make the best decision for themselves.  If you read articles and watch videos that Jace produced in 2021, his approach is the same now as it was then.

While other firms pivot their messaging to comply with new IRS guidance, Jace continues preaching the same conservative principles that have helped clients recover hundreds of millions . . . while sleeping easy at night.

related posts:

Can You Claim Employee Retention Credit in 2023?

Can You Claim the Employee Retention Credit in 2022?

Employee Retention Credit Scams: What You Need to Know

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