Employee Retention Tax Credits - Optimize ERTC to Offset COVID-19 Losses

Welcome everybody to today's episode of HR Simplified, where we are going to be talking about all things ERTC. And the— I like that somebody's wanting to make life a little bit more interesting here on the St. Patty's Day. We've already got people chiming in on the chat for those joining live. Please feel free to go ahead and jump in and share where you're from, what you do, what you're hoping to get out of the session today. We wanna make this as interactive as possible. We're gonna be talking all things ERTC, frequently asked questions, an overview, all that great stuff. So I am Matt Vaity. I am the CEO of ERG Payroll and HR headquartered here in Columbia, South Carolina, normally beautiful Columbia, South Carolina, a little rainy today, but I'm joined by David Young, from Rockerbox. I'm gonna allow David to introduce himself here in just a moment, but we're gonna be talking about all things ERTC eligibility, the most recent expansion, the qualifications for companies. And we're recording this on March 17th, 2021. So you can put a pin in that in case we talk about something that's time sensitive. It's important to know when and where we are recording this. So David, how are you doing today, sir? Thank you so much for joining us.

I am good. Thank you for having me. I got to figure out how to get— I get a better picture like yours up there. I got to get color or something.

But yeah, man, you guys sent me some low-quality, uh, photo here. I gotta, I gotta get something better going. And, and, um, yeah, and so, so David is a CPA and an attorney, and he's going to be sharing some information with us about, um, some of the most recent updates and even just kind of going back a little bit, talking eligibility from 2020, 2021. And we're going to keep this as conversational as possible. Like I said, just Chime in, in the chat if you're listening live. If you're listening to this recording after the fact, thank you so much. And you can see the visual or listen to the podcast in all of the normal channels. And please make sure you connect and follow with David and I on LinkedIn. And we're always providing up-to-date information as it relates to human resources, specifically a lot of great stuff with trying to navigate everything going on here in 2021. So I'm gonna go ahead and get this thing kicked off here, and we're gonna talk about some of the different places that we can be accessed and found. So if you're looking for information related to a follow-up from this, everything will be posted on ergpayroll.com. Please make sure to subscribe to our podcast where you can catch updates like this, along with our YouTube channel where we distribute updates for all size organization, well, mostly small businesses, small to midsize businesses that will be relevant to you and help you on your journey. So let's go ahead, David, let's jump into the ERTC overview. Why don't we just start with you kind of sharing with everybody what is ERTC, what was the intention, what has changed? And I know we're going to dive into a little bit more of the details as we go, but let's just hear kind of the overview of what this is and what the value is to employers.

Yeah, by all means. Thank you, Matt. And so at a high level, back in March of 2020, One of the initial COVID relief packages, the CARES Act— again, a name most everyone on this hearing this will recall— the CARES Act was adopted, and the CARES Act put forth, you know, a number of different COVID relief packages. One of them, the two most common things everyone would have heard about, was, um, was the PPP loans, the first tranche of PPP loans. And as well as the initial stimulus checks, uh, that were sent to individuals. Um, those items got the most attention, but there was a lesser-known, uh, provision in there. There were many lesser-known provisions, but one of them was the ERTC, the Employment Retention Tax Credit, the ERTC. And what it did originally was it said if you don't take PPP money— recall the point of PPP money was to keep people employed to take a loan to keep people working. And it said, well, if you don't take PPP loans, well then you can be eligible for this Employment Retention Tax Credit. Meaning if you will continue to employ the people without taking the loan, we'll give you a very similar benefit without the loan, but you just take the credit against your employment-related taxes. And so it was a secondary option. And really, the reason for it was because PPP loans at the time were limited to 500 employees or less, and so large employers were out. And so at the time, that's how it played out. If, if most of the people on this hearing this or on this call, I imagine, probably received PPP money, and so you would not have been eligible. And at the time we went out and secured ERC credits for large employers, employers that were more than 500. And so we did that for a lot of hospitals and health systems because they tend to have a lot of people with more than— have a lot more than 500 employees. But the but becomes at the end of 2020, one of the latter relief packages went into effect December 27th. You have the, that next phase of relief. And that adopted again more stimulus checks and the second round of PPP, but it also fundamentally changed ERTC. Among other things, at that point they said you can now double dip on the programs. So you can take both PPP and ERC. And so that opens up the door to a lot of people hearing this, a lot of people on this call, to now get another benefit And it also changed the rules and it said, well, you can have one credit in 2020 and you can have more credits in 2021. And so there really is a lot of potential credits for a lot of people out there. I'll use our, our company as an example. We were— we took PPP money, um, and we were analyzing the rules shortly after the December Act went into effect, and we said, well, hang on a second, we qualify. And again, that's what we find as we go around the country working with a lot of different clients. So I know we'll get into more detail, but Matt, is that a fair overview for you?

Yeah, that's great. Thanks for providing that. And I think the one thing, you know, as you lay the foundation here, that everybody's probably wondering first and foremost, and I think it's helpful because, you know, if you're listening to this, if you're watching this, and you just determine here in the first couple minutes that your organization's not eligible, then you might save a half an hour in listening or watching the rest. Not that you don't want to hear David and I talk ERTC all day long. I know it's, it's how you want to spend your days and quite frankly how you should spend your days. But let's talk a little bit about that. Let's talk about the eligibility for employers so people can determine whether or not they're eligible. Let's talk about also, I want to kind of preface this right now. I'd love to hear some of your thoughts on people that either might have thought they were eligible but aren't, or don't think they're eligible but are. What are some of the use cases you're running into out in the field?

Yeah, so let me, let me hit on, on all those things. Um, um, first, like I say, it's really common that we'll talk to people and they say, oh, we looked at this back in, you know, May of, of 2020 and we decided we didn't qualify. And again, it's just really important to point out, because the rules changed in 2020, a lot of times people didn't go back and look at the rule again. And so, like I say, it is worth reevaluating at this juncture where we sit. And we're right now looking at 2021 employer eligibility. This, this, this slide really goes to the question and the issue of do you qualify for this credit? And as you said, Matt, we'll talk about this, and it may be a result where you say, hey, I'm out, and, you know, let me save some time. You should listen to this in 2020 because the rules on qualifying for 2021 and 2020 are different. So you should listen to those two parts and then make that decision. But generally the way we approach it is when we talk to people is we say, hey, let's talk about, um, let's talk about whether you qualify. And if we check those boxes, well, now we know you're entitled to money. Now the question is just how much money are you entitled to? And let's keep moving. But the initial point is just right here to say, do you qualify? And so for 2021, here are the rules for qualifying. One, you either need a full or partial suspension order suspending your operations by the government. And let's break that down. Full or partial. The government doesn't need to have shut down your whole business. It could be a partial shutdown. By way of example, if you were a golf course and maybe people could golf but you were no longer allowed to serve food or people couldn't come into your environment, That's fine. But you'd still qualify there because a part of your business was impacted. It doesn't have to be at the state level. It could be a local, could be a city, could be a county, could be any level, could be federal. We just need a government order of some sort impacting or limiting your operations. Again, this is— now I'm talking right now 2021. We'll talk about 2020 in a second. Um, that's one option. Okay, the second one is if you have gross— really gross receipts, gross revenue that is, uh, 20% or more, uh, down from, uh, from the same quarter compared to 2019. So we're comparing Q1 of 2021 against Q1 of '19, and if you had a revenue drop comparing those two periods of 20% or more you, you would also be eligible. You don't need to satisfy both of those, uh, tests. It's not an 'and,' it's an 'or.' If you have a government order or you have gross receipts below 20% or more down, that would also qualify. Either one. We see it a lot in hospitality, restaurants, events, most, most every entertainment type type, type function we see it in. Just as a few examples, healthcare is also interesting. Their healthcare here, you know, construction is an interesting one, and I'm just hitting a bunch of different industries. Construction is an interesting one. We have construction clients that really boomed in 2020, surprisingly, but now are dipping and are hitting that 20% mark. And so again, all different, but, but lots of different things there. But once again, I'll just hit this point hard. A lot of people were under the impression that, hey, I took PPP money, I'm not eligible. That's not the case. You can double dip in these programs.

Let's talk about that first point a little bit, the full or partial suspension, because I kind of teased this because I've been hearing folks start to say, well, basically everybody's eligible now because of the full or partial suspension by the government. Weren't we all impacted by that in some way, shape, or form? What's your interpretation of that? How are you advising your clients?

Yeah, the answer is a wide majority of the people we're talking to are impacted. Now, that, that same test exists in 2020 and 2021. The issue for 2021 is we need a full or partial suspension in this quarter of 2021, and that's more limited, right? Restaurants still are checking that box. Event planners, event-type situations are still checking the box. It's a little hit or miss when you move into other industries. Healthcare is also one that's hit or miss. But we also see rolling sort of what we call sort of rolling orders. And what I mean by that is there are orders in certain areas where you see spikes in test or positive cases, and that impacts the county as a whole. And so you really just have a wide range of things. And we're just looking for an order that says, hey, you can't do X, X being some part of your business, and you probably qualify. We were on— just to use another example, we were on with a golf owners association yesterday. And somebody said just what you said, Matt, which is, well, wait, hang on. This is 99.9% of our members qualify based on what you're saying. And the answer to that is that's exactly right. It's pretty wide ranging.

That's great. And I think so a little bit more of a tease just to preface to folks here that that's 2021. As we mentioned, you want to be clear because there are some differences between 2021 and 2020 and we're going to go through 2021 a little bit deeper here, talk about the qualified wages, further qualification before we dig into 2020. So if you are— there's some possibility for 2020, you might want to hang in there for just a few more minutes, and there very well could be. But let's continue on this process of looking at 2021 and some of the qualifications. What are some of the other things that qualify an employer to be eligible?

Yeah, so, um, so now we're moving into— and staying with 2021, and again, you'll, you'll see as we keep moving, um, the rules between the two years are just similar enough and just different enough to be confusing. But we'll stay with which is fun for everyone, right?

Yeah, that doesn't sound like anything we've encountered over the last 12 months.

No, no, never heard of that. But so for 2021, so again, now we've said, okay, if you meet one of those first two rules, now you qualify. Okay, let's calculate your credit. And as is up here, how we calculate your credit is different depending on how big of a business or organization you are. And I, I say organization because you don't have to be a business, um, or a for-profit business. In 2021, you can be a government entity and qualify. You can be a nonprofit and qualify. You can be virtually anything and qualify. But coming here, if you have 500 employees— and I should say, if you have 500 FTEs As reported in your 2019 ACA filings, that depends— that, that dictates how we calculate your credit. That was a very specific way to say it. We generally just say, do you have 500 or more employees? But we can get into the granular detail here in a moment. But that said, if you're under 500 employees and you qualify, then we calculate your, your credit based on just total wages paid, and we're running through your payroll looking to calculate this credit. And, and doing the math there. If you're over 500, now the credit's based on people who were employees who were paid even though they may not have been working or may not have been working in traditional areas. Um, just to give you a very simple example of, well, what does that mean? Um, we run into businesses in many areas where they say, well, we were shut down, um, we couldn't open we couldn't open normally, but we couldn't, you know, just not pay our manager or one of our, you know, key employees or key people because then they would leave and that would have been detrimental to us. We see that maybe in healthcare where an OR was shut down and you can't get rid of the, um, you don't want to get rid of a physician or a clinician. We see this in other areas where maybe we couldn't operate, but we couldn't let that key manager or that key person leave. But that's what we're calculating if you're over 500 employees. We're looking for those sorts of scenarios. Another example would be where you furloughed people or terminated people and you still had to carry their health insurance for some period. That qualifies you even in that over-500 world. And so again, you know, do you qualify, yes or no? If yes, how many employees do you have? And then we decide how we calculate that.

All right, that makes sense, or as much sense as it's going to make, right? So, so we've determined whether or not we're eligible for 2021. We've, we've identified some of these criteria, but, you know, one of the hotter topics here that's, that's coming out of this are what wages actually qualify. So when we start to look at some of the things we're going to talk through here of, you know, percentages of qualifying wages, you know, let's talk about that, but also how PPP loans play into that and some of the impact that PPP has on these wages.

Yeah, so, um, so you're eligible for a credit of up to $7,000 per employee. And so a simple example, if you had 100 employees, you were able to maximize that credit, you would be looking at a $700,000 credit as an organization. Um, and for 2021, that's per quarter, so you could get $700,000 in Q1, Q2, Q3 and Q4. So it can be a very material credit if you can qualify. It is 70% of wages, uh, of wages paid. And so to get to $7,000, you need to have paid someone $10,000 in a quarter. But, but that's how it's calculated. And again, depending whether you're over 500 or other— 500 employees for purposes of 2021 means we're either just under 500, we're just analyzing your payroll and calculating it based on that. Over 500, then we're hunting for those paid but not working scenarios.

Any impact from EIDL or PPP on that?

Oh, great question. You, you can double dip on the program, you can't double dip on the same dollar. So that's part of the work we do when we work with someone is allocating the dollars in a way that maximizes. So let me give you a couple examples of that, right? So let's say somebody qualified for both PPP and ERC, and let's say we paid a worker $10 for an hour of work on February 1st of this year. You— if you use that $10 to qualify for a PPP forgiveness, we couldn't use that same dollar as ERC. We can't double dip on that same $10. But we can allocate it, right? And so a couple different strategies for allocation there, right? So owners, if you own, I believe the rule is 60% or more of the company, you wouldn't qualify. Your wages don't qualify for ERC, but those wages do qualify for PPP forgiveness, and it extends to an owner's relatives in that circumstance. And so we, we manage how we allocate if there are family members in the business to put as many dollars as possible in PPP while preserving as big of an ERC credit as possible. So you do have to be thoughtful and, and strategic in how you do that. But that's part of what we do when we help people with it.

That's awesome. Let's take a look at this now. The kind of next thing to consider are these eligibility windows. Who— what are the windows? How do those work? What should we know as employers?

Well, so for 2021, uh, like I say, it's always based on, on 500. It's 500 employees is what we're looking at, or less. Um, we're looking for those eligibility windows, um, as, as we look to apply to that PPP, right? And so again, you generally, as a rule of thumb, uh, can apply for forgiveness off of a 24-week period when you take PPP money. And so we're always sort of managing that as strategically as possible while, um, while, while applying for the ERC credit. And so for 2021, um, there, there's, you know, being a quarterly credit, it becomes pretty interesting as we're trying to balance all those things. But, but that's what we're looking at.

Interesting. Yeah, it's definitely a tightrope you're walking there. Um, and if you— if anybody has any questions related to 2021, if you're watching live, go ahead and throw those into the chat. If you're listening to this after the fact, don't hesitate to reach out to us. I gave the contact information at the beginning, matt@econline.com. Ergpayroll.com, david@rockerbox.tech. Did I get that right? I don't have it in front of me.

Uh, yeah.

Okay, cool. And I meant to ask you at the beginning, David, what's the story behind Rockerbox? I love that name of your company. What's the story behind that?

We, um, we— well, we screen. So, so imagine the, the metaphor is a rockerbox is a tool used to sift through, um, data, sift through, um, literally in, in what it's from is sift through sand and rock looking for those nuggets of value, right, gold or minerals. That's what we're doing is sifting through data in the HR space and finding value in a number of different ways, this being one. We have other tax credits we help employers with, and so just a number of different things we help in this space around. Matt, if I can, I saw a question pop up while we were talking. Around owners. Again, I believe it's 60%, but that's the standard. And so imagine you had 10 employees and you are an owner and a 60% owner, the exclusive owner. And so you're in that 10 employees and you're in that payroll. It is true that you, as you being that 60%+ owner, your payroll won't accumulate for the credit. The other 9 employees would, assuming the other 9 employees aren't your relatives. But, but those employees wouldn't— or you as the owner wouldn't qualify. But like I say, the others would. And that's what we'd be calculating a credit based on.

And what about EIDL?

Yeah, EIDL. I'm sorry, help me out.

There's the, the, the EIDL loans and the money that, that is used from there. Would that be treated the same way as PPP?

Yeah. Yeah, I believe so.

All right, great. And we had somebody thought this credit was for the first 2 quarters. Has this been extended to the 3rd and 4th quarters as well?

Yep. It was just extended into the next 2 quarters, I believe, last Friday. So that is very new, but it has been extended into Q3 and Q4.

Radical. All right. 2021, we're going to put a bow on that for now. We'll come back if anybody has further questions related to 2021. And now, like you said, subtle differences between 2021 and 2020. But the one thing that I'm seeing, folks, that I want to make sure they're clear on is that if you're eligible for, for one or the other, you need to go after one or the other or both.

Don't leave this money on the table.

So let's talk about that 2020 eligibility and how that might be different from the 2021 eligibility.

So, so 2020, again, two-part test, same full or partial suspension by government order. Test number one. Second, gross receipts at 50%, a 50% decrease comparing quarter over quarter to 2019. So comparing Q— by way of example, Q2 of 2020 against Q2 of 2019. Same for Q3 or Q4. If you have a 50% drop or more in revenue, then you would qualify for 2020. Or— and again, it's an or, not an and— or you're looking for the government order. And 2020 is really where it's pretty rare we talk to somebody who doesn't qualify in 2020. That's pretty rare because, as you said, Matt, 2021 is a little spottier depending on your industry, depending on what you're doing or what's applying here in this— in the last quarter. But back in March and April of last year, it's very rare we don't find a business that wasn't impacted in some way due to the government orders. And again, there are some exceptions, right? But it's pretty rare.

So do I have to have both of those things going on? So do I have to have the full or partial suspension and the gross receipts below 50%, or can I just have one or the other?

Just one or the other.

Great. Awesome. And now I just want to clarify one thing going back to 2021 eligibility.

Is—

did I read that correctly or hear that correctly in that the gross receipt measurement for 2021 is compared to 2019 instead of 2020? Is that correct?

That's right. Everything's compared to 2019. I think, I think the policy behind this is essentially right. 2020 was the whole year was sort of off. And so everything we're comparing against is 2019.

All right. So I think you're right. When you look at 2020 eligibility, I'm sorry for all those, all those, all the people who jumped off a little bit earlier and said they weren't eligible. I saw a couple of you in the chat. I'm going to specifically send this back to them and make sure they jump on here at the 2020 portion and don't miss out on the credits available. When we look retroactively now that that is something we can do. So, so how does it change, if at all, when we look at the employer status related to the qualification?

So you'll recall that when we did the— when we talked about this in 2021, it was a 500-employee number. Now we're— now for 2020, it's 100. So again, we're once again looking at your 2019 ACA filing to confirm what your FTE count was. But that said, now depending on the answer, that 100 is what we're looking for. And so if you're 100 or less, we're taking your payroll and we're just calculating it based on what you paid to people. If you're over 100 for this purpose, at this point we're in the world of saying, okay, how did you pay people? What did you pay people who weren't working or weren't working in their normal capacity? Again, some of the examples we gave a few minutes ago, uh, still being the same things we're looking for. But again, 100 is the, is the, is the sort of benchmark that we're using to decide how to calculate.

Awesome. So what about on the qualified wages front? Is there— what's different in 2020 versus 2021?

Same thing as before, except the number is now 5,000. It's 50% of qualifying wages up to 5,000. And there's just one credit for 2020. And so again, if that hypothetical company that had 100 employees, you could qualify for $500,000 credit for 2020, and that, that would be the maximum credit. We don't have multiple quarters, but, but that— but $5,000. Otherwise, it's essentially the same. Okay.

And so, yeah, you mentioned we don't have multiple quarters. We're just looking at a single quarter in 2020. Is that correct?

Or we're looking for the whole year, but your eligibility window, this is where we're now looking for where are those orders What were those orders? Almost every state had an order that went into effect between March 16th and March 20th.

Okay.

Maybe, maybe a couple days later than that are a couple states, but every state had some order that went into place during this window. And then the question is, how long did they stay? And it varies by industry. Some began to open up, some industries started opening up in May. Some remained limited in their operations going forward. Again, it's a state-by-state and locality-by-locality analysis that we engage in here.

Awesome. We've got a couple of questions coming in from chat, and one of these might be a little too specific. I'm not sure if we'll be able to answer this. First one is, if we're a nonprofit who does 2 events per year and moved our event from onsite to virtual, Do we qualify as partial suspension from the government because the venue we were using for the event was initially shut down?

Based on what you've just said, I believe so. I think you have a government order that limited your operations, your normal operations. Now, you may have been able to try to do something else, but our initial— again, without knowing greater detail, my initial reaction to what you just said would be that you probably do qualify.

Well, and I think about that from the perspective that the— that venue was likely shut down because of a government ordinance that you couldn't get more than X number of people together at that period of time. So there's, there's a pretty high likelihood there. And we've got a second question that came in, but we can't use the cash that we earned from PPP in that equation, correct?

Yeah, that, that, that's correct. And so So to answer that is, so what normally we do when we engage in this is we give— when we engage, we give our clients a list of things we're looking for. And largely, it's an export of your payroll system, right? It's an export of the data from your payroll system so we can see what your payroll was over periods. And then we gather your PPP information.. And using a real simple example, and, and to give an example that combines both of these questions, we're right now working with an event planning group. And this, this, this group put on trade shows and other events, much like the first question just a moment ago was. And they're in this very scenario that you just said, also with PPP. So we take their payroll information and we map out their payroll information from March 15th through the end of the year. We at the same time take their PPP information and we analyze the two together and we ensure that we're not taking— applying PPP forgiveness on an ERC credit dollar. But we do that analysis and at the same time then we're analyzing the orders that impacted them in the various states where they operated. And we say, well, you weren't allowed to put on this event here, so we— so that, that, that applies and that gets you December. And we do the analysis on those wages. And so again, just to balance both those questions together, they're great questions, but, but that's how we conduct our analysis and work with our clients.

Got it. That makes perfect sense. All right. So we've determined we're eligible. We've started to identify possible credits. Now it's time to calculate and claim these credits. So if I'm doing it myself or if I'm doing it with Rockerbox, talk to us a little bit about some of the document requirements. What, what am I going to need to submit? What does this process look like? How tedious is it if I decide to DIY it? Share with us a little bit about how all this works.

So here's what we generally request when we engage is this is the, the initial documents we ask the clients for to help us do this analysis. What we do is we can, we, we do the work and then we essentially give you a stack of work papers and we give you a binder that's got basically all the work papers. It's got everything to support the credit. It's got all the detail. And we'll, we'll prepare the 941. Or in this case, you'd be preparing a 941-X. If you're talking about 2020, you'd be preparing a 941-X, essentially an amendment. You amend your 941 in order to get your refund. And just to talk about that for a second, we get a lot of questions sometimes about people saying, well, here's how much I paid in FICA. What do I get to claim? It's— this is an odd program. The government basically said, here's how you calculate how much money you're entitled to. So go apply these rules and you come back and say, okay, let's pretend that credit came back at $100,000, and you say, well, but my FICA is this or my FICA is that, or here's my payroll taxes. It actually doesn't matter. We're— it doesn't matter at all. This is a refundable credit. It just so happens the way you take it is through your payroll filings, and which is sort of strange and sort of, uh, unique, but, but nonetheless, that's what it is. And so what we do is we give you that binder, um, we can prepare that 941-X for you, that amendment, and you can file it and get a refund for the number that— whatever you're entitled to. And so that's what you get. In 2021, we're in a position where the filings aren't, uh, complete, and so, uh, we work with someone to claim the credit in real time and hopefully avoid having to outlay that cash at all.

Gotcha. Okay. So document requirements for 2021, pretty negligible, or it looks like we're missing a couple of things here.

Pretty, pretty— they're pretty— it's pretty much the same.

Okay. Awesome. And so seems like a, you know, a process that somebody could embark on, on their own. Um, and I know that we've tried to help folks navigate this independently without Rockerbox for some of our clients. And, uh, it was very tedious with a lot of questions and sort of limited expertise out there and a lot of kind of, uh, trying to do what we're doing here today, find the education, get into the things. So, so what if I want to work with a company like Rockerbox? How does that work for me as an employer?

Yeah, so I mean, it certainly is the case that somebody can work on this on their own. That said, it is in your payroll filings, and so there are issues if it's done wrong. We've helped people fix that. We've had situations where people have done a DIY job and their penalties and other issues outweigh what it would have cost if we had done it to begin with, but that's certainly a possibility. We make this really simple. We do a contingent fee. That contingent fee means that either we find you money and you get money and we get a small part of that, or else we don't find you any money and it doesn't cost you anything. And it's really that simple. The lift on you all for our clients to do this is really a couple hours. Because we're asking for a handful of documents and then we go off and do the work. We come back and we may ask you a few questions along the way, but, but not very many. And we're able to go off and do the work and come back and give you that package. We've secured— I think that the count right now is $30 million and growing in the amount of credits we've gotten for people. And we're happy to keep on going and hopefully help some, some more people.

Well, somebody chimed into the chat with the question of, so I can ask my payroll company to do this, and I'll answer that as the owner of a payroll company. And that's— I know for us, we had the decision to make of whether or not we wanted to help our clients to really do the front-end work, that certification, identification, claiming of the credits is the part where we looked at all the work involved in that. We just said, you know what, we're probably not best suited to do this. We don't have the internal expertise, we don't have the bandwidth, we don't have the time. But as you saw, to kind of answer your question on the other side of that, yes, you're going to have to recoup the credit through payroll. So you will engage your payroll company at some point, or at least your payroll tax filing, regardless of how you do that. But, but I know from my perspective, after I looked at this at face value and I said, oh, this is simple, we can help our clients do this, you know, it just is going to require X, Y, and Z. And then the more I started digging Looking into it, I said, you know what, let's, let's just engage with our good old friends over at Rockerbox and let them go ahead and do their thing and file all these on behalf of our clients because it's just going to be easiest for everybody involved to have the professionals do it. And to this point of what's on the screen right now, as we're sharing with those watching the webinar, it's 100% contingent. If they— if you guys don't find any credits, they don't pay anything. And so it's a win-win for everybody involved. It was my perspective on it when we evaluated whether or not we were going to provide this to our clients as a payroll company. Let's talk about some of your early wins. Like you mentioned, I think you said you've captured $30 million in credits or something along those lines. Well, talk to us about some of the wins and some of the industries that you guys found a lot of success in.

Again, as you're saying, it's really been just about every industry we've looked at has opportunity. We've really not found any where there's none. Again, just to give you what are almost silly examples. Take a law firm. Most every— if a law firm is doing litigation, trial work, almost every court in America has been limited its activities. And so again, the examples are far-reaching and only limited really by your imagination. Everybody's been affected, just about. And so here are just some simple examples, but a few. Hospitals, again, have such large employee counts. Those credits can really add up. And they were under some really hard limitations there early because all elective procedures were suspended for some period of time in almost every state. And so hospitals are an example where you really see some big credits. But nonetheless, here's a world where you still see meaningful credits in a number of ways. Almost every restaurant we've seen has been impacted, right? Indoor dining has been suspended. Most restaurants are down. Even the ones that are up, though, are impacted by orders limiting what they can do. We've seen, again, just a few examples being, as you say, skilled or trades. We've seen construction groups, we've seen electrician groups that qualified here. Just, again, it's incredible, but it's pretty rare that we run into a business that isn't eligible for something. You know, I don't know if my metaphor works or not, but I often tell people this This credit's really like walking down the street and you see a $20 bill on the ground. Are you, you know, are you going to pick it up? That's really all this is. And most people are eligible for that $20 bill, except in many cases it can be more than that.

So that's awesome. Yeah. And I think to the point earlier, I got to make sure I distribute this back out to the people that jumped off before they saw the 2020 eligibility, because I think that's one of the biggest components of this is just understanding that it's not a single year and the rules change a little bit year over year. So the one last question coming in here on the chat, if I had employees but went down to only myself working and I'm a 50% owner, am I still eligible?

So I'd want to see the specifics on that because the question is, when did you go down? Right. And, and did— was it on March 15th? That everybody got laid off, or was it on April 1st? Because if we're talking April 1st, well, you, you probably got a credit of a couple thousand bucks at least, you know, something. Um, and so, um, the, the question is there's, there's still probably money there, it's just how much. And, uh, we will help anybody. Um, if it really is just you, uh, and you are 50% owner, I think we qualify because I think the number is 60%, and again, I'll double-check it, but that's the number, um, that I believe is applicable. And so you might still even get a credit in that situation.

Awesome. And our good friend Sean Witkowski just chimed in. Hey, Sean, what's up? He wants to know. So he said, all right, owner's wages with 60% or more ownership don't count. But I heard that spouses of these owners do count, but not any other relatives. Is that correct?

I don't think that— unfortunately, I don't think that's correct. The rule is broad enough to capture marriage stepchildren. I think, I think it even goes so far as to be potentially step-grandchildren. And so really our rule of thumb is family members are going to be out. But if there's a unique scenario that somebody wants us to look at, we'd be happy to.

Well, once again, one of the reasons why I've enjoyed working with your team is because of the fact that you guys are playing this close to the close to— as close to the line as you can while still making sure that you're getting the credits that people are eligible for. Because going back to the earlier comment, there are a lot of people taking that 2021 information and kind of twisting it in different ways and making assumptions to try to get credits for their clients that ultimately could come back to bite them in the long run. And we really don't want to be a part of that. We want to provide trusted information, trusted resources, and trusted partners that can help our clients and our our partners and friends. So on that note, if anybody's looking for further resources related to ERTC, if you simply go to our website, ergpayroll.com, you'll see a coronavirus or a COVID section right at the top. There's a ton of stuff on there. You can subscribe to any of our channels, YouTube particularly, we put out a lot of great videos. But yeah, I just wanna offer up our contact information one more time. It's matt@ergpayroll.com or david@rockerbox.tech. If you reach out to either one of us, we're happy to help on this. Like I mentioned early on, this is a purely contingency thing from Rockerbox, so you have nothing to lose if you're looking for somebody to help you with the processing of these credits. If you just want more guidance, like I said, we've got some resources to help you along your way. David, any parting thoughts before we move on here for the day?

No, other than to just say thank you. Thank you for your time. Thank you, everyone. I hope everyone— I hope this was helpful and informative. And again, like I say, we'd love to help anybody anybody who has an interest here. And like I say, most people are qualifying for something, and it's just how much.

That's awesome. Thank you so much. And as always, this information was brought to you today by ERG Payroll and HR. Um, we're doing our best to help educate all of you and, uh, as to all of the goings-on as it relates to COVID and everything else going on in the world that relates to HR compliance, to help employers to navigate these unique circumstances. Uh, we are a mission-based company. We actually give away 5% of our business to nonprofits. That's 3% of all revenue, 1% of our time, and 1% of our product. We really view it as part of our mission to serve the business community in any way that we can. And so we're grateful and also hopeful that this information was helpful to those of you that jumped on today. And I always part with my favorite quote whenever we do one of these sessions from Jim Goodnight that 95% of your assets are going to drive out of the gate, walk out of the door every evening. It's your job to keep— maintain a work environment that keeps these people coming back every morning.. And we— one of the best ways we can do that is by keeping our business afloat, right? And taking advantage of all the resources that we have available to us to make sure that, that we're not only surviving but thriving as we go through this unique circumstance that we face in 2020 and 2021. So thank you again, David, for this really valuable information. We appreciate your time today, and I look forward to talking with all of you soon. Thank you.

Thank you.