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Business Apr 20, 2023
Samuel B. Ledwitz. | Photo courtesy of the Law Firm of Bezaire, Ledwitz & Associates, APC
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By Shel Segal
It’s no secret that the past few years have been rough for most business owners. But just because the pandemic is just about in the rear-view mirror, that doesn’t mean financial help for businesses is no longer available.
Longtime estate planning attorney Samuel B. Ledwitz, who also works with dozens of small business owners, said the employee retention credit — or ERC — can still help businesses get back — or stay — on fiscal track.
He added the idea for the ERC was actually born out of the original economic stimuli packages passed by the federal government back when the pandemic was in its infancy.
“It’s been a tough few years being in business,” said Ledwitz, president and managing partner of estate planning law firm The Law Firm of Bezaire, Ledwitz & Associates. “During the pandemic, many, many business owners applied for PPP, or the Paycheck Protection Program. During the pandemic, in an effort to get the economy going the government approved billions of dollars to be issued into the general public, whether it was through direct stimulus payments to individuals or payments to business owners. What they said was if you lost revenue because of the pandemic, we will make a loan to you.”
The loans were issued with a one percent interest rate, Ledwitz said, making them very affordable and attractive.
“The bigger you were, the bigger the loan,” he said. “A year or two later you were to start paying it back.”
In fact, in many instances the loans did not even have to be paid off, Ledwitz said.
“If you met certain criteria, you didn’t have to pay the loans back at all,” he said, adding the program was administered through the Small Business Administration and was set to expire in 2021. “You got to keep the money and it was just written off. The second round worked very much like the first one. If the government caused you to lose business through the pandemic-related shutdowns, this was their way of making it up to you. That’s where most people think the story ends.”
And the next story is the advent of the ERC, Ledwitz said.
“However, in one of those bills, the IRS gets to administer ERC, or the employee retention credit,” he said. “The ERC is a lot like PPP, but it’s not a loan. It’s a gift. You have to again show you lost money during the pandemic years. You need to have someone look at your payroll documents from that time period and have the correct forms submitted. And the great thing is the business owner can get up to $26,000 per employee who was kept on the payroll during the pandemic. That’s unheard of. And depending on the number of employees you have, that number could add up really fast.”
In addition, Ledwitz said you need to act quickly because while the program just got renewed for another year, it will eventually expire. He added also that while you don’t necessarily need an attorney to file the correct forms “you do need someone who is familiar with the program and understands how to submit the forms, whether it is an attorney or possibly a certified public accountant, The reason is you have to show to the government that you lost money and you have to show that data correctly. Otherwise, you have a good chance of getting denied and the program will expire. So, you might as well get it correct the first time.”
If you would like to discuss any aspect of a proper Estate Plan or would like more information on the ERC, please phone The Law Firm of Bezaire, Ledwitz & Associates at (626) 398-0100 or log onto www.SmartEstatePlans.com.
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