The other night I was sitting on the couch mindlessly scrolling through my social media account, when I realized how much clickbait pops up promising to sell me the next great product that I can’t live without.
At first glance, most of it seems too good to be true. I have come accustomed to seeing these advertisements, so I know to proceed with caution. Sometimes I get lucky and find a “great deal,” but often upon closer inspection, I can tell the product is not what the enticing headline led me to believe, so I move onto the next ad that catches my attention.
This cautious curiosity is also essential when determining whether your financial institution qualifies for the Employee Retention Tax Credit (ERTC). For some financial institutions, the ERTC is a great opportunity to help the organization recover from business disruptions related to COVID-19. For others, it is just an enticing headline that should be approached with caution.
These are two scenarios in which your financial institution may qualify for the ERTC:
- Operations were fully or partially suspended by an appropriate government authority limiting commerce due to COVID-19.
- The company had a 50% reduction in 2020 gross receipts compared with the same calendar quarter in 2019 or a 20% reduction in 2021 gross receipts compared with the same calendar quarter in 2019.
We repeatedly hear of boutique consulting firms approaching financial institutions saying they are eligible for the ERTC credit and that they can help prepare the calculation for a contingency fee. If you are approached with such offers, you must do your due diligence to confirm you’re eligible for the credit and this is not just a “too good to be true” moment. Read the fine print before working with one of these companies and make sure they will be there to support you if you are ever audited in the future. Due to the complexity of the calculation, it’s important to ensure you are working with a reputable firm.
How Wipfli can help
If you believe you may be eligible for the ERTC or would like to discuss your unique circumstances, reach out to Wipfli for input about whether and how to proceed. We can help you determine your eligibility for the ERTC credit and whether it makes sense for you to apply.
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