NEWITY sat down with Employee Retention Credit (ERC) expert Dane Colvin, who recently hosted NEWITY’s How To Apply For ERC webinar. Spearheading the ERC program from inception, Dane has successfully led hundreds of Members through the application process. With his vast experience working with Members, he outlined the most common questions regarding the ERC application process.
Why is ERC such a good opportunity for small businesses?
Unlike PPP, there’s no spending requirements for ERC. Business owners can use the cash for any purpose.
For example, I worked with a NEWITY Member using his retirement funds to pay employees during COVID. He was thrilled to hear he could use ERC funds to refill his retirement account. You can use these funds for whatever is needed to make the business whole again.
Another benefit of ERC is business owners don’t need to generate new information. They should already have all the necessary documents. When a business works with NEWITY on their ERC application, they provide the documents and let us do the work for them.
What’s the biggest misconception about ERC among small business owners?
I think a big misconception is that it’s going to be a ton of work, or that Members will need to prove payroll or their spending. Instead, ERC is about the eligibility parameters and calculating specific wages paid during that time. NEWITY makes this a very simple process to follow.
What are the biggest pitfalls small businesses can avoid with ERC?
While it is a very streamlined process with NEWITY, there are a few ERC general pitfalls to avoid.
First, is not applying because you don’t think you’re eligible. Some businesses incorrectly believe they only qualify is if their revenue or gross receipts show a significant decline. This is not the case.
We’ve had businesses with no revenue decline receive the credit because they were impacted by local shutdowns. Our shutdown review team, staffed with legal professionals, provide a detailed memo supporting the shutdown periods in state and local areas.
Second, business owners need to be responsive. Once they provide the necessary documents, they still need to check correspondence from our team. We may need answers to follow-up questions in order to submit the application. Some business owners stop responding when they’re so close to the finish line. It’s such a shame because they qualify for the money and it’s waiting for them to claim.
Additionally, be sure to double-check that spelling on names and addresses is correct. When we file with the IRS, it has to be an exact match.
Another pitfall is not knowing what your accountant or bookkeeper has done when it’s time to gather documents. If you changed bookkeepers or accountants, you will need to have access to your data in order to claim the tax credit.
Finally, we have seen sad stories of small business owners getting scammed by “ERC farms” who claim to help businesses obtain maximum credit, but they file with inaccuracies, and the business could get audited later on. It’s important to only work with legitimate financial service providers, like NEWITY. Legitimate providers will use secure data transfer links and have the professional personnel on staff to ensure your calculation is done accurately.
How does NEWITY’s approach to ERC differ from other providers?
We are very thorough in helping Members get their tax credit, while also preparing them for possible investigations in the future.
Sometimes a business owner will say “Another company didn’t ask for these documents – why does NEWITY need them?” This is a red flag. Our process is more honest and complete, in case the business owner is ever audited.
Why should small businesses work with NEWITY for their ERC application?
First, peace of mind. Our approach is more thorough than any other providers out there. We also have the expertise to guide business owners through the entire process. When you work with NEWITY, you’ll be assured that:
1. Nothing slips through the cracks
2. You receive the maximum ERC you qualify for; and
3. You get to keep that money.
Another reason to work with NEWITY is our expertise on the Paycheck Protection Program, or PPP. The ERC calculation needs to factor in PPP loan forgiveness in order to avoid “double-dipping” on wages that were paid using PPP funding. We have worked with over 115,000 borrowers through forgiveness and origination of PPP Loans. We are confident that we are factoring these loans correctly into the calculation. Other companies might not be experts in PPP like NEWITY.
Finally, I the personal touch we offer is hard to find elsewhere. Members working with us know they can pick up the phone and call their representative with any questions. NEWITY’s co-CEO Luke LaHaie has even made himself available to members throughout this process. I don’t think that level of personal service is happening anywhere else.
Do you have any information on ERC timelines and what to expect when submitting?
The typical timeline we see is qualifying businesses will receive their check nine to twelve months after submission. However, we’ve had members receive their money in less time. It really depends on the IRS and their workload. For that reason, it makes sense to try and get your application submitted as soon possible.
We are no longer accepting ERC applications. However, we’re happy to help you access affordable funding through an SBA 7(a) loans.
