GRAND RAPIDS, Mich. (WOOD) — Businesses can still apply for the pandemic-era Employee Retention Credit but should be wary of bad actors offering to help.

Qualifying businesses can get up to $26,000 per employee with the ERC, “one of the most generous tax credits to be offered by the IRS in the last couple decades,” Small Business Association of Michigan President and CEO Brian Calley said.

The IRS in March issued a warning to watch for ERC “schemes.” It says firms are encouraging businesses to apply for the credit in cases where the business may not qualify. They may lie about how to qualify and could use it for identity theft.

“Anyone who improperly claims the credit has to pay it back and may owe penalties and interest,” the IRS website says. “The only way to claim the ERC is on a federal employment tax return.”

Warning signs of an ERC scheme includes aggressive marketing and large upfront fees.

“The ads are all over radio, TV and social media. You may even get ads that look like official government letters, or texts, emails and phone calls advertising ERC eligibility,” the IRS said.

To combat those schemes, SBAM has checked out and partnered with two vendors that can help businesses determine if they qualify for the credit and apply. The vendors were vetted through an “extensive” process with SBAM’s leadership team and a panel of small business owners, Calley said.

“We’re very, very confident that businesses that go through these sources in order to determine qualification can do so with confidence,” Calley told News 8 Wednesday.

The SBAM is also working to combat misconceptions business owners may have about the ERC.

“We had noticed across the landscape that … there’s just a lot of noise around the Employee Retention Credit and we’re concerned that it almost reached a level where a lot of small businesses were tuning it out,” he explained.

Calley said some small businesses have been told by professionals that they don’t qualify for the credit due to outdated information.

“The credit has changed significantly from when it was first introduced,” he said.

When the ERC was first rolled out, Calley said businesses had to choose between the ERC and the Paycheck Protection Program.

“That later changed. This is another major misconception that a lot of businesses have is that because they took the PPP, they don’t qualify for the ERC,” he said. “That’s not true.”

However, expenses that were paid using PPP money cannot be applied against the credit, he said.

Another misconception businesses have is that they must have seen a decline in sales in 2020 or 2021 to qualify, Calley said. He explained businesses can also qualify if they saw a disruption as a result of the pandemic, like government shutdowns or supply chain problems.

Calley hopes businesses won’t miss out on the ERC due to “nefarious practices.”

“So many small businesses have taken it on the chin in the last few years,” he said, pointing to things like government shutdowns, labor shortages and inflation. “…We want to make sure that they just don’t miss out on the opportunity.”

For more information on the vetted partners, go to