Does Your Franchise Business Qualify for an ERC in 2023?

Does Your Business Qualify for an Employee Retention Credit?
Chapman speaks with entrepreneur Kevin Harrington.

ERC Provider Helps Eligible Employers Receive Funds from CARES Act Program

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Many small and medium-sized businesses that took financial hits from the pandemic are entitled to tax credits through the federal Employee Retention Credit (ERC) program established under the Coronavirus Aid, Relief, and Economic Security Act of 2020. But business owners who kept employees on payrolls during the pandemic often are unaware that they qualify for an ERC payout. And even if employers think they’re eligible, they may not know how to secure benefits.

That’s why the firm ERC Provider was established. Its staff educates employers about the ERC program, including who qualifies, and also handles the application process, which involves complex Internal Revenue Service rules and conditions.

What Businesses Qualify for ERC?

ERC Provider Founder and President Sunshine Chapman.

ERC Provider Founder and President Sunshine Chapman says employers “may be eligible even if their revenues didn’t decline. Lost revenue is just one way to qualify for this assistance. Other impacts, such as shutdown orders that limited travel, supply-chain disruptions, reduced capacity, and modifications to the services that a company offered are other justifications for ERC benefits.

“Some 80% of companies with W-2 employees can receive the ERC. And employers who received Paycheck Protection Program [PPP] loans, even loans that were forgiven, are still eligible for ERCs.” She emphasizes that this ERC money “isn’t a loan. It’s a tax credit.”

An employer may receive as much as $26,000 per W2-employee under the program, and even part-time employees may be eligible.

ERC funds can quickly become big bucks. “An employer may receive as much as $26,000 per W2-employee under the program, and even part-time employees may be eligible,” Chapman says. “That’s broken down as follows: $5,000 for 2020, and $7,000 per quarter for the first, second and third quarters of 2021. Our average claim amount is $500,000 before taking out the processing fee. The fee is either 10% if the client pays upfront or 15% if they pay at the time the payment is received from the IRS.” ERC funds typically arrive within about two to four months.

Why ERC Specialists Are Vital

Although business owners may want their tax preparers to handle ERC paperwork along with their federal income tax returns, that’s often a non-starter. Chapman says “86% of ERC Provider’s clients actually come to us from CPAs, accountants and other financial professionals who refer their clients to us for help with ERC applications. CPAs typically don’t want to handle the ERC because it requires a lot of training for a short-term program – it will end April 15, 2024 – and they mostly focus on income tax returns. ERC benefits require a series of payroll tax filings that most CPAs aren’t comfortable with.”

By contrast, ERC Provider specialists have received in-depth training about every nuance of the ERC program, she says. The Utah-based company, which operates in all 50 states and Puerto Rico, serves business owners who have fewer than 500 full-time workers.

So far, ERC Provider has claimed over $500 million for more than 2,000 businesses.

Three-Step, Two-Week Process

Clients appreciate that ERC Provider has streamlined the qualifying and application process to three stress-free steps that can take just two weeks from the initial phone call until finalized paperwork is filed with the IRS. Here’s how it works:

  1. An ERC Provider specialist conducts a 20-minute interview with the business owner.
  2. Clients securely upload their ERC qualification documents. Among these are W-2 employee payroll information; an employee head count for 2019, 2020 and 2021; and PPP loan information.
  3. After that, ERC Provider specialists analyze the documents. If all systems are a-go, ERC completes the application, the client signs it, and ERC Provider submits it to the IRS for funding.

“ERC Provider’s process has led to a 90% commitment rate, which is the percentage of our filings that are successfully paid out by the IRS. Ours is higher than competitors because we do a lot of due diligence to ensure that the substantiation and documentation is sound,” Chapman says.

ERC Provider’s Track Record

“So far, ERC Provider has claimed over $500 million for more than 2,000 businesses. In some cases, the companies had previously been told that they didn’t qualify for the ERC program,” she says.

ERC Provider serves a wide range of businesses. “Some of our clients own large name-brand franchises or regional companies with hundreds of employees. But we’ve also helped mom-and-pop businesses with just a single employee or a handful of employees.

“The ERC program has been a windfall for some of these businesses,” Chapman says, with the money used to cover extras such as employee bonuses or capital improvements. “But for others, their ERC benefits have been crucial to their very survival as they continue to rebound from the pandemic.

“And the beauty of ERC Provider’s business model is that there’s no risk to clients. Our company gets paid only if the business owner receives ERC funds.”

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Mary Vinnedge is an award-winning journalist who has served as editor in chief, managing editor and senior editor at national and regional publications, including SUCCESS and Design NJ magazines. She also held reporting and editing roles at The Dallas Morning News and Charlotte Observer newspapers.

Before Mary began covering franchise news and trends as a staff writer for FranchiseWire and Franchise Consultant Magazine, she developed articles on topics ranging from lifestyle, education, health and science to home projects, horticulture, gardening, interior design and architecture. These articles included her reporting on academic news at her alma mater, Texas A&M University, when Mary worked in the marketing department of the Texas A&M Foundation. She continues to be a news junkie and subscribes to several publications.

Today Mary and her husband are empty nesters living on Galveston Island near Houston. The couple’s blended family – scattered around the United States – includes five children, four grandchildren and two very spoiled, very barky miniature schnauzer rescues.
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