There is a lot of confusion surrounding the Employee Retention Credit, and it’s no surprise why. The government has made several changes since rolling out the program in March 2020 under the CARES Act. So, let’s separate fact from fiction and debunk some of the most common myths about this very worthy program.


MYTH: My business received a PPP loan, so I won’t qualify for the Employee Retention Credit.

FACT: You can actually receive both a PPP loan AND the Employee Retention Credit! As long as you use the proceeds of your PPP loan for eligible expenses (like payroll, mortgage interest, or rent), you should still be able to claim the Employee Retention Credit.

MYTH: It’s too late for me to apply for the credit.

FACT: Despite the October 1, 2021 expiration date, the Employee Retention Credit is still available for businesses that have experienced a decline in gross receipts or had to suspend operations due to government orders. Businesses have three years to file for a retroactive ERC refund.

MYTH: I don’t think my revenue declined enough to qualify.

FACT: The revenue decline test differs for 2020 and 2021. For 2020 the revenue decline must be 50% as compared to revenue for the same quarter in 2019. For 2021 the revenue decline must be 20% for any quarter compared to the same quarter in 2019.

MYTH: I don’t qualify because I didn’t have my business at the start of the pandemic.

FACT: The Employee Retention Credit is calculated on a calendar quarter basis. For companies created after March 2019, the IRS will use the first quarter to determine the decline.


There are a lot of components to the ERTC program, and the eligibility rules are complex. But Miami CFO has helped numerous business owners maximize this refundable payroll tax credit. It’s always better to talk to an ERC expert than assume your business doesn’t qualify.

Use this link to schedule a meeting: https://calendly.com/miami-cfo/