During the surge of COVID-19, the Humane Society of North Texas, like many businesses and organizations, took advantage of the Payroll Protection Program to recover some of the economic impact of the pandemic.
“We were an essential business, so we didn’t shut down, but it did change how we did business,” said Susan Gulig, president of the nonprofit organization.
She wasn’t sure the organization would qualify for any more benefits.
So when Frank Innelli, managing director for strategic consulting services for Whitley Penn, told Gulig the organization might qualify for a refund through the Employee Retention Tax Credit program, she was surprised.
“Frank laid it all out and we filed and just got our check earlier this month,” she said.
The tax credit program provides tax credits or refunds for a percentage of payroll in each quarter the company qualifies.
As the impact of COVID-19 on the economy diminishes, some businesses may think they’ve exhausted all the government programs designed to help small and large businesses, Iannelli said.
“Nobody talks about this program, so a lot of people aren’t aware,” Iannelli said. “But just about every company I work with qualifies.”
Whitley Penn has worked with about 500 companies on the program and estimates those companies have received about $200 million, Iannelli said.
Ken George of Canyonwood Partners in Fort Worth is promoting the program as well.
“That’s a lot of money that these companies can use, particularly now that we’re in an uncertain time economically,” he said.
Many companies believe that if they participated in the $800 billion Payroll Protection Program from the Small Business Administration, they don’t qualify for the ERTC tax credits, George said.
“That was the case initially with the CARES Act, but the American Rescue Plan Act of 2021 changed that,” he said. “But a lot of people don’t know that.”
That was the case with Twisted X, a Western footwear company based in Decatur.
Jeff Jones, chief financial officer at Twisted X, said he thought the company had taken advantage of all the government programs available to aid businesses dealing with the economic impact of COVID.
“We weren’t really hit as hard as a lot of companies, but we did get hurt and we took advantage of the PPP program from the Small Business Administration,” he said.
“I really wasn’t aware of the program, but sure enough, we qualified,” he said.
Jones said it took about four months to receive funds through the program.
George said that when many businesses saw revenues return to more normal levels in 2021, they may not realize they can retroactively claim credits if they qualified in 2020.
“That surprises many businesses, but many, many, if not most, qualify,” he said.
George is concerned that the current debt ceiling talks in Washington, D.C., will see the program get cut before some companies and organizations can take advantage of it.
“They have never really advertised the program to begin with,” he said. “So I can see it being a casualty when they’re trying to make budget cuts.”
While the government may not advertise the program, there are companies out there offering to help businesses get their tax credit funds that may not be legitimate.
“I must get an email or a phone call almost every day on this,” said the Humane Society’s Gulig. “They’re getting really aggressive.”
The Better Business Bureau and the Internal Revenue Service have both issued warnings about possible scams involving the tax credit program.
Sometimes the scammers are just seeking personal or business information, according to the IRS.
“While the credit has provided a financial lifeline to millions of businesses, there are promoters misleading people and businesses into thinking they can claim these credits, said IRS Commissioner Danny Werfel, in a statement on the scams.
Gulig recommends businesses work with someone they know and trust.
“We worked with our bank on the PPP loans,” she said. “But this was a bit more complicated.”
The ERTC process is more complicated than the PPP process, George said.
“The PPP was administered by the Small Business Administration and was designed to get money out quickly,” he said. “This is the IRS and that’s a different animal.”
Are you eligible?
The IRS guidelines on eligibility:
An employer is eligible for the ERC if it:
- Sustained a full or partial suspension of operations limiting commerce, travel or group meetings due to COVID-19 and orders from an appropriate governmental authority or
- Experienced a significant decline in gross receipts during 2020 or a decline in gross receipts during the first three quarters of 2021 or
- Qualified in the third or fourth quarters of 2021 as a recovery startup business.
The Better Business Bureau recommends businesses be careful sharing information with companies that promise a return.
Bob Francis is business editor for the Fort Worth Report. Contact him at firstname.lastname@example.org. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.