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What are IRS Rules for the Employee Retention Credit? 

 October 22, 2023

By  Jace W Campbell, CPA

irs rules for erc

The world of tax credits is vast and complex, but let’s try to simplify one of its elements – the Employee Retention Credit (ERTC). Understanding this tax credit is crucial for many business owners, as it could significantly impact their finances. Now, let’s dive into our exploration.

What Exactly is the Employee Retention Credit?

The Employee Retention Tax Credit, in essence, is a refundable tax credit tailored specifically for businesses that maintain their workforce during times of economic hardship. Its genesis was in response to unprecedented circumstances like the COVID-19 pandemic when numerous companies faced dire straits. In this scenario, this credit serves as a lifeline. This program’s detailed intricacies could consume multiple pages alone – admittedly turning into quite a dry read. Therefore, I’ll aim to distill this information down with enough detail for you to grasp its core tenets…

Qualifying for the ERTC: A Deeper Dive

The process of qualifying for the Employee Retention Credit is indeed intricate, with numerous nuanced requirements and prerequisites to consider. The IRS, in its Notice 2021-49, provides some guidance on these qualifications. Key language from that Notice said that an essential employer may qualify for ERTC if the employer had to modify its operations in order to comply with a governmental order, and those modifications resulted in a more than nominal impact on the business… However, each taxpayer’s situation is unique, even when subject to the same governmental orders. Therefore, qualification for ERTC should be determined based on the facts and circumstances of each taxpayer.

One critical factor we evaluate with our clients at JWC ERTC Advisory CPA is their ability to serve their customers at the same levels that they did pre-pandemic. If significant disruptions occurred due to compliance with government orders or substantial gross receipts reductions, it might signal potential eligibility for this credit.

Navigating these rules can indeed feel like threading a needle. However, resources like our “Ultimate Guide to ERTC” and video consultations are available to help you decipher these complex qualifications. You may feel a sense of achievement as you start understanding why you may legitimately qualify for these credits or realize that your business doesn’t meet the requirements – saving you potential penalties from erroneous claims.

Defining Full or Partial Suspension of Operations

Understanding what constitutes full or partial suspension of operations under government orders is vital in determining your eligibility for ERTC. According to IRS guidelines, if your business operations were suspended partially or entirely due to an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19, it counts as a full or partial suspension…

However complex this process may seem initially; it doesn’t have to be daunting. With expert guidance from credible sources such as JWC ERTC Advisory CPA and a bit of patience, you can navigate these complex qualifications. Your next stage in exploring ERTC is just a step away… Whether you are ready to assess your situation further or decide not to pursue this credit, remember – understanding the rules is the key.

Beware of Lies and Deceptions

While navigating through ERTC rules, it’s critical to remain vigilant about potential deceptions or false promises made by firms trying to entice you into signing up with them. Always remember – you’re ultimately responsible for these tax credit claims. And don’t let any supposed ERTC “expert” convince you otherwise.

Why Choose JWC ERTC Advisory CPA?

When it comes down to deciding who should guide your journey through ERTC rules and regulations, JWC ERTC Advisory CPA stands out as a credible and reliable partner. With us, you’re not just another client – you are a partner whose success is our primary objective. And we do this through ensuring transparency and ethical practices in our advisory services.

Facing the Fear, Uncertainty, and Potential Gain

Understanding ERTC rules often comes with its fair share of fear and uncertainty. However, by choosing to work with JWC ERTC Advisory CPA, you can transform these emotions into potential gains. We help alleviate these fears by providing a comprehensive review of your eligibility for the credits – giving you peace of mind about your claim.

The Recent Crackdown on ERC Promoters

The IRS has recently been cracking down on ERC promoters in an attempt to curb ERTC fraud… This effort underscores the importance of working with reputable firms when claiming these credits.In conclusion, whether you’re an entrepreneur who has done some research on your own or a CPA trying to serve your clients efficiently and ethically, understanding the rules surrounding the ERTC is essential. The information provided here will hopefully serve as a starting point in your exploration of this topic. And remember – whenever in doubt or needing assistance navigating through these rules, JWC ERTC Advisory CPA is ready to assist you 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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