What Is An ERC Grant?

Is the ERC a small business grant? Keep reading to find out more about this small business tax credit that could benefit your small business.

• Erica Seppala Erica began writing on small business topics in 2008. She joined Merchant Maverick in 2018 and focuses on loans, accounting, and POS. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll. She has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a graduate of Limestone University and resides in Greenville, South Carolina.

  Editor

• 
  Jul 17, 2023

  UPDATED

The Employee Retention Credit (ERC) is putting money back into the pockets of small business owners. If you’ve heard of these “ERC grants” and aren’t familiar with the program, you may be curious as to how you can apply to get funding for your business.

The term “ERC grant” is a bit misleading, though, as (spoiler alert) the ERC isn’t a grant. However, for businesses with employees, the ERC is actually better than a grant. Here’s what you need to know.

Learn More About Our Top Picks

Company	Best For	Next StepsBest For
Omega Funding Solutions Read More	Fast funding with ERC Advances Fast & easy application process Fees: Undisclosed	Fast funding with ERC Advances Fast & easy application process Fees: Undisclosed Visit Site Read More
ERC Specialists Read More	Free ERC analysis Maximum refunds Fees: 10%-15% of ERC refund	Free ERC analysis Maximum refunds Fees: 10%-15% of ERC refund Visit Site Read More
Lendio Read More	Fast & easy application process Pay when you receive your refund Fees: 15% of ERC refund	Fast & easy application process Pay when you receive your refund Fees: 15% of ERC refund Apply Now Read More

Read more below to learn why we chose these options.

What Are ERC Grants?

A grant is defined as money that is given by a government, organization, or individual that does not have to be repaid. Grant programs for small businesses are generally very competitive and have strict requirements for industries, usage of funds, and the application process.

While the ERC program does have a few similarities to grant programs, there is no such thing as an ERC grant. Instead, the ERC is a refundable tax credit available to eligible small businesses that kept employees on payroll throughout 2020 and 2021.

How The ERC Works

The good news is that businesses that are eligible for the ERC don’t have to go through the complex and often disappointing grant application process. By filling out the correct tax forms (or hiring one of the best ERC companies to do the hard work for you), you’ll receive the money owed to you as a refund. These funds can then be spent however you choose with no limitations.

Through this program, qualifying small business owners may receive up to $26,000 per employee. Eligible business owners may receive up to $5,000 per employee paid in 2020, and up to $21,000 per employee paid in 2021. Eligible startup recovery businesses may qualify for additional funding for 2021.

There is no limit on funding and no restrictions on how funds are used. Since the ERC is a tax credit and not a loan, these funds are yours to keep and do not have to be repaid.

Qualifying For ERC

To qualify for ERC, businesses that paid qualified wages during the COVID-19 pandemic must meet one of these two conditions:

• Had a significant decline in income during any quarter in 2020 or 2021
• Fully or partially suspended operations due to a government order in 2020 or 2021

Before claiming your ERC refund, make sure you fully understand the full ERC eligibility requirements to determine if you qualify.

Claiming The ERC Refund

There are two ways to apply for ERC: complete and submit corrected tax forms to the IRS or hire an ERC professional.

If you go the do-it-yourself route, you’ll complete and submit IRS Form 941-X to the IRS. This is a more time-consuming option that requires you to calculate the ERC refund. But the extra work means that you don’t have to pay any fees out of your refund.

You can also hire an ERC company, tax pro, or accountant. For a fee, these experts will help you claim your ERC refund. For busy business owners, this small fee may be worth bypassing the time and frustration of filing tax forms on your own. ERC companies provide other benefits, including audit protection, maximum refund calculations, and additional tax and funding services.

3 Best ERC Companies For Claiming Your ERC Refund

If you don’t want to take on the ERC alone, an experienced ERC company can help you claim your refund. From determining if you qualify and calculating your refund to filing the proper tax forms, Omega Funding Solutions, ERC Specialists, and Lendio have you covered.

1. Omega Funding Solutions

Omega Funding Solutions	Visit Site

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2. ERC Specialists

ERC Specialists	Visit Site Read our Review

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3. Lendio

Lendio	Apply Now Read our Review

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The Bottom Line On ERC Grants

Although there are no ERC grants, there is the ERC tax credit which can give you up to $26,000 per eligible employee. Like a grant, ERC funds don’t have to be repaid. They can also be used for any purpose, whether you’re still recovering from the pandemic or you’re ready to grow your business.

If you haven’t claimed the ERC yet, you aren’t too late. Claims for 2020 must be submitted by April 15, 2024, while claims for 2021 must be submitted by April 15, 2025. Even though you still have time to beat the ERC deadlines, don’t delay. Make sure you claim your funds as soon as possible to avoid missing out on this potentially lucrative tax credit.

ERC Grant FAQs

In Summary: 3 Best ERC Companies For Claiming Your ERC Refund

1. Omega Funding Solutions:
   • Fast funding with ERC Advances
   • Fast & easy application process
   • Fees: Undisclosed
2. ERC Specialists :
   • Free ERC analysis
   • Maximum refunds
   • Fees: 10%-15% of ERC refund
3. Lendio:
   • Fast & easy application process
   • Pay when you receive your refund
   • Fees: 15% of ERC refund

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Erica Seppala

Editor at Merchant Maverick

Erica began writing on small business topics in 2008. She joined Merchant Maverick in 2018 and focuses on loans, accounting, and POS. She is a Certified ProAdvisor for QuickBooks Online and QuickBooks Payroll. She has been cited in MSN, Reader's Digest, Vox, U.S. News & World Report, and Real Simple. She is a graduate of Limestone University and resides in Greenville, South Carolina.

View Erica Seppala's professional experience on LinkedIn.

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