Is There a Difference Between ERTC VS ERC? 

 November 18, 2023

By  Jace W Campbell, CPA


In the current landscape of tax credits and relief options, there seems to be a cloud of confusion surrounding the question…Is there a difference between the Employee Retention Tax Credit (ERTC) and the Employee Retention Credit (ERC)? This is a critical query that most business owners find themselves wrestling with.

In this article, we’ll explore this primary question while also addressing two other common questions related to ERTC that arise frequently in our readers’ research…What are the primary challenges associated with claiming these credits? How can a business ensure that it’s getting the most out of these relief options? This additional context about ERTC will help guide you in deciding whether this is a topic that merits further investigation for your own business.

Breaking Down ERTC vs ERC

It’s crucial to understand that while the acronyms are similar, ERTC and ERC are not identical. Both pertain to tax credits aimed at assisting businesses during times of financial strain. However, they have distinct nuances and are governed by different legislation, making it crucial to understand what each entails before making any decisions about your company’s finances.

A Deeper Dive into the Employee Retention Tax Credit (ERTC)

Often, amidst the chaos of navigating financial downturns, it’s challenging for businesses to stay afloat while retaining employees. That’s where the Employee Retention Tax Credit (ERTC) comes in. A lifeline of sorts, this refundable tax credit is designed to support businesses that have held onto their employees during challenging periods such as the COVID-19 pandemic.

Think of ERTC as a safety net that cushions the blow of financial hardships. It operates on a simple principle: If you retain your employees, you can access a tax credit against certain employment taxes… A win-win for both businesses and their workers. However, just like any tax credit, it’s not as straightforward as it appears on the surface.

The ERTC’s guidelines have been updated continuously to accommodate the evolving economic landscape. As such, it becomes critical for business owners to stay abreast of these changes. Knowledge about the latest developments not only makes the claim process smoother but also ensures that businesses can maximize their credits.

Also read: How to Check the Status of Your ERTC Claim with the IRS?

ERTC: The What, Who, and How

To further demystify ERTC, let’s break it down in a Question and Answer format.

What is the Employee Retention Tax Credit?

In essence, the Employee Retention Tax Credit (ERTC) is a lifeline extended to businesses who keep their employees on payroll during times of financial struggle. Born out of necessity during events like the COVID-19 pandemic, it offers a refundable tax credit against certain employment taxes.

Who is eligible to claim Employee Retention Tax Credits?

The ERTC’s eligibility criteria are quite broad. Virtually any type of business or non-profit organization in the US that had W-2 employees on payroll during the pandemic and paid payroll taxes on those employees can claim the credits.

How do I leverage ERTC?

Here’s where knowledge becomes power. Understanding the intricacies of ERTC and how they apply to your unique situation is crucial. There’s a myriad of self-proclaimed “experts” out there offering advice on ERTC claims. But understanding the fundamentals yourself will enable you to make informed decisions about navigating this process.

Whether you’re a business owner brushing up on your ERTC knowledge or a seasoned CPA looking for efficient ways to serve your clients ethically, having a deep understanding of programs like the ERTC can significantly enhance your financial strategy.

However, it’s important to remember that ERTC is not one-size-fits-all. Each business has its unique context and needs… And that’s where JWC ERTC Advisory CPA comes in. We are not just another tax advisory firm. We take the time to understand your specific situation, guide you through the complex ERTC landscape, and help you claim the credits you rightly deserve.

A Closer Look at the Employee Retention Credit (ERC)

While it’s easy to confuse the Employee Retention Credit (ERC) with the ERTC due to their similar acronyms and purposes, it’s important to remember that they are indeed separate programs. The ERC is a more general program that provides tax relief for businesses striving to retain their employees during economically challenging times. But just like the ERTC, the specifics of its benefits and how they’re calculated and distributed can vary.

The Employee Retention Credit: Explained

To simplify, consider the Employee Retention Credit (ERC) as a financial buffer for businesses that retain their workforce amidst economic downturns. It’s a form of financial relief that deters layoffs or reductions by offering incentives in the shape of tax credits… Amounts that get deducted directly from what businesses owe in federal taxes.

This may sound straightforward – keep your employees, get a tax break. However, this isn’t a simple tit-for-tat. The ERC comes with its own set of qualifications and calculations. For instance, one must consider whether there’s been a significant decline in gross receipts or if the business has been fully or partially suspended due to government orders.

Who Is Eligible for the Employee Retention Credit?

Eligibility for ERC extends to most businesses and non-profit organizations in the US that continued to keep their W-2 employees on payroll during challenging economic periods. However, the specifics can be quite intricate and it’s where the expertise of JWC ERTC Advisory CPA becomes invaluable.

Navigating the Employee Retention Credit Process

The key to effectively leveraging the ERC lies in understanding its nuances. How does it differ from ERTC? How does one calculate potential credits? What are the implications of claiming these credits on future tax filings?

JWC ERTC Advisory CPA takes the guesswork out of this process. We walk you through every step of the way, ensuring you understand how each decision impacts your bottom line. Our team is adept at analyzing your unique situation and providing tailored advice to help you maximize your benefits from programs like ERC.

Our comprehensive guides, presented in a question-and-answer format, provide easily accessible information for taxpayers to understand these programs better. These guides serve as valuable resources, but they’re just the tip of the iceberg when it comes to the support and expertise we offer.

Whether you’re exploring the ERTC or the broader ERC program, we at JWC ERTC Advisory CPA stand ready to provide guidance, ensuring you get the financial relief you’re entitled to while keeping your business compliant with all relevant tax laws.

Challenges in Claiming ERTC

In today’s saturated market, thousands of ERC firms are claiming expertise in helping businesses claim these credits. Many of these are simply ERC Promoters who outsource the actual work to others. This practice often results in a fundamental disconnect where these Promoters may not operate in the best interest of their clients. The problem is compounded by the fact that prospective clients are often inundated with ads portraying these Promoters as tax experts. However, all ERC firms are not created equal, and savvy business owners should know what to look for when selecting an ERC firm.

Why Choose JWC ERTC Advisory CPA?

Given this backdrop, you may wonder why you should engage JWC ERTC Advisory CPA instead of any other ERC firm. The reason is simple: we are true experts in this field. Unlike many ERC Promoters, we do not outsource our work – ensuring that your interests are always our top priority. Furthermore, we do not resort to cold-calling or spam emails to attract clients.

Our commitment is to make the process of claiming your ERTC as easy and streamlined as possible, typically requiring only 10-15 minutes of your time. If your path to qualification involves a “full or partial suspension of operations”, we prepare you for potential scrutiny by asking tough questions upfront. Our rigorous approach ensures that your refunds are legally maximized and that you’re well-prepared for any audits by the IRS.

The IRS Crackdown on ERC Promoters

It’s important to note that the IRS has recently intensified its efforts to curb ERTC fraud. As part of these efforts, the agency has been cracking down on unscrupulous ERC promoters who mislead clients about their eligibility for these credits.

At JWC ERTC Advisory CPA, we stand apart from these unscrupulous promoters. Our stringent practices and genuine expertise in ERTC ensure that our clients are always on the right side of the law, ready to face any scrutiny by the IRS.

The Benefits of Partnering with JWC ERTC Advisory CPA

In conclusion, working with JWC ERTC Advisory CPA offers significant advantages over dealing with run-of-the-mill ERC firms. We provide clarity amidst fear and uncertainty, and help you gain from your rightful entitlements under the law. Furthermore, if you’ve previously filed for ERTC but have questions about your eligibility for these credits, you can turn to us for an independent review.

Understanding the difference between ERTC and ERC is just the start. As you venture deeper into this complex landscape, we’ll be your trusted guide – keeping you informed and protecting your interests every step of the way.

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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