Small businesses struggle with ERC tax credit submissions
63% of business leaders and decision makers feel their business lacks resources or needs help handling Employee Retention Tax Credit (ERC) tax credits.
Small business owners wear the many hats of their operations from HR to CEO to foreman to all aspects of whatever it takes to keep the business afloat. Accounting is another hat they often wear, and a new survey from Omega Accounting Solutions shows that 63% of business leaders and decision makers feel their business lacks resources or needs help handling Employee Retention Tax Credit (ERC) tax credits.
“There are millions of unclaimed dollars available, and nearly any business impacted by the pandemic is eligible to claim their credit,” says Jay Woods, founder and president of Omega Accounting Solutions. “Employers worked hard to stay afloat during the pandemic. They simply didn’t have the bandwidth to manage constantly shifting business environments; learn and adhere to local, state, and federal regulations; and discover the ins and outs of the ERC to see if they were eligible.”
Among the findings conducted by Atomik Research:
- Nearly 9 in 10 (89%) of those surveyed say that between the pandemic, inflation and labor shortages, they feel it is nearly impossible for small businesses to thrive in today’s economy.
- Almost 9 in 10 (89%) respondents say the surge in operating expenses and/or the cost of goods have made paying employees a competitive wage unaffordable.
- 83% of respondents feel the early 2020s have been the worst time for small businesses since the Great Depression.
- 81% of business leaders and decision-makers indicated that business is suffering because they lack knowledge of or adequate counsel on accounting procedures, financial planning and related business tasks.
- Nearly a third (31%) of survey respondents indicate that the tax or financial experts who typically assist with their business’s tax needs did not provide accurate or enough information regarding the ERC.
- 45% of respondents who believe they are ineligible to claim ERC benefits, believe their business is ineligible because they have already applied for a Payment Protection Program (PPP) loan.
Omega says the survey results indicate that small businesses are often underserved when it comes to tax credits. Most executives lack expert guidance in accounting and finance, leaving them to rely on outdated information or form misconceptions that may prevent them from utilizing tax advantages.
Related: Increasing number of small businesses concerned about economy, survey finds
“ERC funds may continue to help businesses remain operational during ongoing economic hardship,” continues Woods. “After the worst of the pandemic, many businesses still face labor shortages, skyrocketing costs of doing business and threats of a potential recession.”
The ERC was passed by Congress during the pandemic to help small businesses get by or back on their feet.