ERC Credit Survey: Small Businesses Lack Tax Credit Guidance

Timothy Gibson | February 13, 2023
Reading Time: 7 minutes

Graphical Title Slide: Omega's New Survey Finds Small Business Owners Lack Resources for Handling Tax Credits

As the Employee Retention Credit (ERC) has gained nationwide visibility, it has faced difficulty gaining traction with business leaders, leaving millions of eligible companies hesitant to file and claim their ERC refunds.

To better support small business decision-makers, Omega Accounting Solutions commissioned a nationwide survey of small business executives, seeking their opinions on the state of the economy, financial guidance, and pandemic-relief benefits such as the ERC.

The survey found that most small businesses felt they were at a disadvantage without adequate accounting or financial direction. Many respondents said the tax or financial experts that they typically rely on for their tax needs haven’t been able to provide enough accurate ERC guidance.

Omega analysts believe that an abundance of misinformation and a lack of clarity around the ERC have left decision-makers vulnerable and confused. But at least one survey finding is clear — small businesses are often underserved when it comes to tax credits.

Infographic that shows 90 percent of leaders believe the ERC helps small businesses stay afloat

Washington lawmakers created the Employee Retention Tax Credit to incentivize employers to keep their employees working during the economic hardships caused by COVID-19. Business owners can still claim the credit today by retroactively amending their payroll taxes.

Nine out of ten executives believe the ERTC helps small businesses survive difficult times. However, to qualify for the credit, your business does not have to be struggling today.

Qualifying for the ERTC is only based on:

The size of your company (number of employees in 2019)
Either your quarterly revenue or COVID-related government mandates that impacted your business (in 2020 or 2021).

Infographic that shows that 9 in 10 small businesses say that they are struggling currently

The Bad News — The pandemic compelled lawmakers to create unprecedented government orders that brought new challenges to businesses. Today, companies are still dealing with a rapid rise in inflation that economists say was caused by a combination of pandemic rescue funds, government stimulus payments, low interest rates, and high energy costs. All of these forces combined to create the perfect storm of economic adversity.

The Good News — Many businesses that survived the pandemic can be rewarded for it by claiming the Employee Retention Tax Credit. The credit amount is based on the number of employees your business had during the pandemic — the more employees you paid, the greater your credit will be.

Infographic that shows small business owners are gravely misinformed about the ERC process. 31 percent claimed that their tax and financial experts did not provide enough or accurate information

The Employee Retention Tax Credit was created in March of 2020 — it is still very new to accountants and financial advisors. Many CPAs were already working overtime to help their clients’ businesses survive the pandemic, and they simply did not have time to learn the complex rules of the ERTC. Many business owners were told they are ineligible for ERTC refunds — even though they may qualify.

Infographic that shows 77% of respondents felt they missed their chance to apply for ERC

Can you receive both the ERTC and PPP?

Yes, you may still qualify for the Employee Retention Tax Credit, despite taking a PPP loan in the past. Many businesses have received both, and we can show you how.

Your business may still be eligible for the ERTC, even if you:

Received PPP funds
Grew your business during the pandemic
Never fully shut down your business

The ERC is not a loan or a grant. It’s a tax refund that does not need to be repaid, and there are NO requirements on how you can spend it.

Infographic that shows 45% of respondents mistakenly believe they can't qualify for ERC because they already applied for PPP

The deadline to claim the Employee Retention Tax Credit has not yet passed. There are two ERTC deadlines, one for claims on 2020 payroll taxes, and one for 2021 payroll taxes. The ERTC deadline is April 15, 2024, for all quarters of 2020, and April 15, 2025, for all quarters of 2021.

While there is still plenty of time to claim the ERTC, congresspeople can vote to end the pandemic tax credit ahead of these deadlines. Business owners are wise to claim the credit as soon as possible.

Graph visually representing that 81 percent of business leaders feel like they lack adequate counsel on accounting

Even the best business leaders need guidance. Oftentimes, what separates top companies from the competition is their access to expert advisors and key data analysis. Accounting and financial regulations can change as a business grows. Utilizing accountants and business advisors that can grow along with your company can make a real impact on your bottom line.

Infographic: 7 in 10 decision makers claimed that the ERC application was just as or more difficult than the PPP loan application

It’s true. Claiming the Employee Retention Tax Credit is not easy. It’s a tedious process that requires careful analysis of at least 20 different business documents. Because it is a new tax credit specifically created for pandemic relief, many CPAs and tax advisors are not well-versed in ERTC rules. Some have told their clients they are ineligible, only to learn later that they do qualify for thousands in ERTC refunds.

Omega Accounting Solutions is a tax credit expert specializing in the Employee Retention Tax Credit and can handle the entire application process for your business. With Omega, all you have to do is answer a few simple questions, upload your documents to our secure portal, and collect your ERTC refund check. Contact Omega to discover if you may be eligible, and how much money you can potentially receive.

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