The Employee Retention Credit could be a significant financial benefit for your law firm—and you might not even know you’re eligible. Many firms overlook this opportunity due to confusion, misinformation, or fear of IRS involvement.
The Employee Retention Credit (ERC) is a complex tax incentive that hasn’t been widely studied or properly understood. Misconceptions are common, and inaccurate advice is everywhere. Unlike typical accounting tasks, evaluating ERC eligibility requires applying tax law to each client’s specific circumstances, often involving a fair amount of legal interpretation and analysis.
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Clarifying the Staff Retention Credit Process
Attorney Adam Williams, Esq., Founder of Rust Belt Law, breaks down the misconceptions and hesitations surrounding the Employee Retention Credit. According to Adam, the biggest hurdle in offering these services—even to fellow law firms—is convincing people the ERC is legitimate. It often feels “too good to be true.” But unlike PPP funds, ERC funds come with no spending restrictions—you can use the money however you choose.
Employee Retention Credit and IRS Concerns
Another reason firms hesitate is because of the IRS’s involvement. The very mention of the IRS can stir up concerns about audits or potential legal consequences. To help mitigate those fears, Rust Belt Law provides opinion letters to each client. These letters include a full legal analysis of the client’s eligibility and a breakdown of why they qualify.
How to Determine If You Qualify for the Staff Retention Credit
There are two main ways to qualify for the Employee Retention Credit:
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Experiencing a significant decline in gross receipts during eligible quarters
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Facing a full or partial suspension of operations due to governmental orders during COVID-19
Many firms qualify without realizing it, especially if they had supply chain disruptions, changes in business operations, or client access limitations during the pandemic.
What Quarters Are Covered by the Employee Retention Credit?
The ERC covers various quarters in 2020 and 2021. Knowing which specific quarters apply—and how to calculate eligible wages—is key to maximising your claim. It’s critical to work with a professional who understands the nuances of the tax code and how it applies to your specific situation.
Want to find out if your firm qualifies for the Employee Retention Credit? Explore our latest insights, guides, and downloadable tools at hiringandempowering.com. You’ll also find weekly podcast episodes that dive deep into law firm growth, tax credits, and leadership strategies that help firms thrive in today’s landscape.
Written by Molly Hall McGrath