Can I File for Employee Retention Credit (ERC) on My Own?

ERC, or the Employee Retention Credit, is a tax credit created by the US government that aimed to encourage businesses to retain employees during the devastating days of COVID-19 pandemic. With huge declines in sales revenues, many businesses struggled to not only keep operations going, but to keep their employees on payroll. Businesses are now taking advantage of the tax credits. One ERC frequently asked question that we hear from small business owners is, “can I file for ERC on my own?”

The answer is yes and no. Yes, technically anyone can make the appropriate adjustments to their business tax filings. However, it’s not recommended. The ERC program is highly complex and individuals that do not have experience with this program can have a difficult time determining their eligibility. That’s why our best answer is no.

Filing for the ERC can be complicated for several reasons. Here are four reasons why individuals that are not experts should not file for Employee Retention Credit on their own:

1. Eligibility requirements: The ERC has strict eligibility requirements, and not all businesses meet the ERC qualification criteria. For example, businesses must have experienced a significant decline in gross receipts or been subject to a government-mandated shutdown to be eligible for the credit. Additionally, businesses that received a Paycheck Protection Program (PPP) loan may face additional restrictions.
2. Complex calculations: Calculating the ERC can be complex, particularly for businesses with multiple employees and varying levels of pay. The credit amount is based on the wages paid to eligible employees, up to a maximum of $10,000 per employee per quarter. Businesses must also calculate the amount of qualified health plan expenses and group health plan expenses to include in the credit.
3. Changing guidance: The rules and guidance around the ERC have changed several times since it was first introduced, which can make it difficult for businesses to stay up-to-date on the latest requirements and regulations.
4. Documentation requirements: To claim the ERC, businesses must provide documentation to support their eligibility and the amount of the credit. This can include payroll records, financial statements, and other documentation.

Overall, the ERC can be a valuable resource for businesses during the pandemic, but it requires careful attention to detail and a thorough understanding of the eligibility requirements and calculations involved. We feel that it’s important to consult with a knowledgeable ERC accountant or tax professional that specializes in ERC to ensure that you are eligible for the credit and that you are filing correctly.

We hope that this article provided a little more insight if you were wondering, ‘can I file for ERC on my own?’ If you’re looking for the best ERC accounting firms, you can learn more about some of them on the homepage of ERCreviews.com. If you have additional questions about ERC, check out our ERC FAQs or contact us directly. We’re happy to help.