Business Insights

Not All ERC Processors Are Created Equal

Updated on January 6, 2025
Category: ERC
Author: Luke LaHaie
5 Minutes to read

As we’ve shared, not all ERC processors are created equal. The IRS warns business owners about ERC processors that over-promise credits due to aggressive determinations of eligibility.

A recent NEWITY applicant shared their ERC calculation from a “specialist” processor for comparison. The “specialist” determined their ERC entitlement as over $470,000, while NEWITY determined it as approximately $20,000.

We’ve outlined the major differences between NEWITY and the “specialist” processor to help protect your small business.

Representation of Eligibility

Be cautious of ERC processors that rely on checkboxes and brief self-attestations to claim eligibility for government-mandated shutdowns.

The IRS recently emphasized in their webinar on ERC abuse that not all businesses impacted by COVID qualify for the ERC. Only businesses specifically affected by government orders can claim eligibility based on those shutdowns.

At NEWITY, our in-house attorneys thoroughly research your business operations, city, and state to find relevant governmental orders.

The legal team creates a detailed memo citing these orders to document your eligibility for ERC, ensuring the burden of proof is on NEWITY, not you.

Calculation Missteps

ERC calculations require detailed analysis to account for payroll, benefits, and government stimulus programs.

Watch for calculations that fail to deduct wages funded by other government programs like PPP or the Restaurant Revitalization Fund.

Ensure wages paid to majority owners and their family members are excluded from ERC calculations.

NEWITY’s calculation process ensures IRS compliance and calculates your ERC credit accurately based on payroll and employee type.

We also consider any government programs your business participated in during the pandemic to ensure accuracy.

An expert should calculate your ERC by thoroughly reviewing your tax filings and payroll documents. This comprehensive review ensures your total ERC filing is correct and compliant.

New Specialist Companies

In the past year, hundreds of companies have emerged, focusing solely on filing ERC claims.

You should be wary of groups that have no other history of government program or tax involvement prior to ERC.

Many of these groups promise IRS audit support, but as a new company solely focused on ERC, the processor may not exist in the future if, and when, you need audit support.

Our team at NEWITY has helped over 120,000 businesses access SBA loans, tax credits, and PPP.

NEWITY performs calculations with utmost care, strictly following IRS guidance and ensuring thorough and well-documented results.

Our work and team remain available to support you with any ERC needs you may encounter.

If the IRS determines that ERC was improperly filed, business owners will be held responsible for repayment of the ERC and may face potential fines. We urge all small business owners to protect yourself against new specialist ERC organizations.

These ERC processors have and will continue to take advantage of small businesses. File your ERC with a trusted company that has a longstanding reputation of supporting businesses in properly accessing capital through government programs.

At NEWITY, we welcome all small businesses looking to access government programs to get started with our team of experts today.

We are no longer accepting ERC applications. We’re happy to help you access affordable funding through an SBA 7(a) loan.

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