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Is ERC a Real Credit or Just a Scam? 

 December 18, 2023

By  Jace W Campbell, CPA

Is ERC a Real Credit

You’ve probably heard about the Employee Retention Credit (ERTC), a benefit under the CARES Act. But you might be asking, is the ERTC real?…and how does it work? Let’s delve into this important topic.

How Confident Are You In Your ERTC Eligibility?

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

Understanding the Employee Retention Credit

Yes, indeed, the Employee Retention Credit is real… and it could have a significant impact on your business. The ERTC is a fully refundable tax credit for employers…intended to encourage businesses to keep employees on their payroll during COVID-19 impacted periods. It was introduced as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act…

This relief measure was designed by Congress…to help mitigate the economic hardship faced by businesses due to pandemic-related closures or restrictions. According to IRS.gov, eligible employers can claim this credit based on qualifying wages paid to employees…

How Does The ERTC Work?

Now that we’ve established that the ERTC is indeed real…you might be wondering how it works. It’s relatively straightforward: eligible employers can claim a credit for wages paid to employees who are not providing services because of COVID-19 related circumstances…

The amount of credit is substantial – 70% of qualifying wages up to 10,000 per employee per quarter in 2021 according to Treasury.gov. This means you could potentially claim up to 28,000 per employee over four quarters in 2021 alone! The government has essentially turned your payroll into a source of capital…

Eligibility for ERTC

Qualifying for the Employee Retention Credit (ERTC) is not an automatic process… As a business owner, it’s important to understand that there are certain criteria your business must meet in order to be eligible. These eligibility requirements have been specifically defined by the IRS.

Also read: What is Common Misinformation About ERTC?

Government-Ordered Shutdowns

The first of these eligibility requirements revolves around government-ordered shutdowns due to COVID-19…If your business has experienced a full or partial suspension of operations because of a government order relating to the COVID-19 pandemic, you could qualify for the ERTC…

This doesn’t just apply to complete business shutdowns either…Even if only a portion of your business was forced to close – perhaps a specific branch or department – you might still be eligible. The key here is that the shutdown was due to an official government order related to COVID-19…

Significant Decline in Gross Receipts

The second eligibility criterion is based on gross receipts… If your business has experienced a significant decline in gross receipts during any calendar quarter in 2021 compared to the same quarter in 2019, you might be eligible for this credit…

But what constitutes a ‘significant decline’? According to Treasury.gov, this means your gross receipts were less than 80% of the gross receipts for the same calendar quarter in 2019. And it’s important to note here that you can qualify even if you did not experience a shutdown…

Remember, meeting these criteria does not automatically guarantee eligibility…The IRS encourages businesses seeking this credit to consult with their tax advisors. But as complex as these criteria may seem, they are put in place for one reason: To ensure that aid gets distributed fairly and reaches those who need it most…

Claiming the ERTC

Claiming the Employee Retention Credit (ERTC) is an integral part of the process…but it involves more than just filling out a form. It requires careful record-keeping, accuracy, and understanding of how federal payroll tax returns work…

Process for Claiming ERTC

The first step in claiming your ERTC is done through your federal payroll tax returns… Specifically, you need to file Form 941, Employer’s Quarterly Federal Tax Return. This form includes a line where you can specify the amount of employee retention credit you’re claiming…

However, be aware that if you have already filed Form 941 without claiming the ERTC and then later determine that you are eligible for it, you will need to file an amended return using Form 941-X…

Importance of Record-Keeping

One key aspect that shouldn’t be overlooked is maintaining accurate and detailed records… Not only do these records help in accurately calculating your credit amount but they also serve as evidence should the IRS question your claim…

In other words, these documents substantiate your claim and can protect your business during an IRS audit. These records include payroll data, government shutdown orders applicable to your business location or industry, and documentation showing significant decline in gross receipts…

Increasing IRS Audits

With increasing reports from authoritative sources like Forbes and Business Insider about rising IRS audits… it becomes even more crucial to ensure that claims for ERTCs are accurate and fully substantiated. The IRS is committed to ensuring compliance with all tax provisions, including those related to COVID-19 relief measures…

As such, if you’re planning on claiming this credit or have already done so, make sure that you’re well-prepared for any potential audit. This involves having clear documentation demonstrating eligibility for the credit as well as calculations showing how the claimed credit amount was determined…

The Recent Crackdown on ERC Promoters

Recently, the IRS has increased its efforts to curb ERTC fraud. This crackdown includes scrutinizing promoters who might be offering questionable or even fraudulent advice on how to claim these credits…

According to a recent article in The Wall Street Journal, some promoters have been using aggressive marketing tactics…often promising business owners they can help them get ‘free money’ through these credits. The IRS has made it clear: they will not tolerate any attempts to exploit these credits for personal gain…

Why Choose JWC ERTC Advisory CPA

In this complex landscape, engaging a trusted advisor like JWC ERTC Advisory CPA can make all the difference. Our team has a deep understanding of these regulations…and we’re committed to helping you navigate this process while staying within legal boundaries…

We understand that these are uncertain times for businesses. There may be fear about making mistakes when claiming these credits or uncertainty about eligibility. But with our expertise and guidance, you can confidently explore potential gains from these relief measures…

Independent Eligibility Review

As part of our commitment to serving our clients, we offer an independent eligibility review for those who have previously filed for ERTC but are skeptical of their eligibility…By engaging JWC ERTC Advisory CPA for this review, you get a second opinion that could either validate your original claim or identify areas where adjustments are needed…

Working With JWC ERTC Advisory

Choosing JWC ERTC Advisory CPA means working with a partner who is fully committed to your success. We work diligently to stay up-to-date on the latest tax laws and regulations…ensuring that you’re making the most of the available credits without falling afoul of IRS rules

In conclusion, the Employee Retention Credit is real and potentially very beneficial for businesses struggling in these challenging times. But it’s also essential to navigate this process carefully…and that’s where JWC ERTC Advisory CPA can help.

Don’t let uncertainty or fear hold you back from exploring potential benefits. Reach out to our team today…and let’s explore how we can support your business through this critical relief measure.

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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