NFIB Weekly NewsLeading the News NFIB’s Small Business Legal Center continues to answer questions on the ERTC (02/01/2023)
The Employee Retention Tax Credit (ERTC), also called the ERC, continues to be one of the NFIB Small Business Legal Center’s most frequently asked about topics. The ERTC expired in 2021, but there is still time for employers to retroactively claim this tax credit for qualifying wages paid to employees.
What is the ERTC?
The ERTC is a direct dollar-for-dollar reduction against the federal employment taxes that employers pay and report on a quarterly basis in their Employer Federal Tax Return (Form 941). A business can claim the credit on qualifying wages paid to employees for any quarter between March 13, 2020 – Sept. 30, 2021.
How do I know if my business qualifies?
There are two general ways a business can qualify for the ERTC:
The business experienced a decline in gross receipts (at least 50% decline for 2020 quarter; at least 20% decline for 2021 quarter) compared to the same quarter in 2019; or
The business experienced a full or partial suspension of business operations due to a government order. This provision also extends to suppliers of a business. If a business can prove its operations were impacted because of the inability to obtain goods or materials from its suppliers, it may qualify for ERTC.
NFIB to Congress: Prioritize Small Business Growth Agenda (01/13/2023)
NFIB highlights legislative priorities for the 118th Congress
WASHINGTON, D.C. (Jan. 13, 2023) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization released a “Small Business Growth Agenda for the 118th Congress,” which highlights feedback from NFIB small business members and reflects the top small business legislative priorities.
“Small businesses are facing economic uncertainty coming out of pandemic restrictions along with historic inflation,” said Kevin Kuhlman, NFIB Vice President of Federal Government Relations. “With the start of the 118th Congress, it is crucial that members of Congress prioritize small businesses and focus on legislation that will strengthen the small business economy.”
NFIB's Courtney Titus Brooks pens op-ed on Small Business Deduction (01/10/2023)
NFIB's Courtney Titus Brooks pens op-ed on Small Business Deduction
WASHINGTON, D.C. (Jan. 10, 2023) – The Washington Times has published a new op-ed, penned by NFIB Federal Government Relations Director Courtney Titus Brooks. In the op-ed, she explains why Congress should give Main Street permanent relief by taking action to make the Small Business Deduction permanent.
“The Tax Cuts and Jobs Act marked its fifth anniversary over the holidays. While this law was a significant win for Main Street, the looming expiration of important tax benefits is challenging small-business owners’ ability to plan. They are increasingly worried that one of the law’s most important provisions, the ‘Small Business Deduction,’ is more than halfway to expiration, and there’s no urgency to extend it. The expiration would result in economic consequences such as lower optimism and less investment, which is why Congress should make the deduction permanent in the 118th Congress.
Forty-four percent of owners are raising compensation (01/05/2023)
WASHINGTON, D.C. (Jan. 5, 2023) – Small business owners’ plans to add positions remain elevated, with a seasonally adjusted net 17% planning to create new jobs in the next three months, down one point from November and 15 points below its record high reading of 32% reached in August 2021.
“Small business owners remain frustrated with the current labor situation,” said NFIB Chief Economist Bill Dunkelberg. “The trend in planned hiring eased slightly as labor quality and labor cost are two top issues for owners. Owners raised compensation again in December to attract and retain employees.”
Forty-one percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, down three points from November. The share of owners with unfilled job openings continues to exceed the 49-year historical average of 23% but 10 points below its record high of 51 percent last reached in July.
Overall, 55% of owners reported hiring or trying to hire in December, down four points from November. Ninety-three percent of those hiring or trying to hire reported few or no qualified applicants for the positions they were trying to fill. Twenty-six percent of owners reported few qualified applicants for their open positions and 25% reported none.
EPA’s final rule on WOTUS ignores SCOTUS and creates further confusion (12/30/2022)
WASHINGTON, D.C. (Dec. 30, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released the following statement in response to the Environmental Protection Agency’s (EPA) and Department of the Army’s final rule on Waters of the United States (WOTUS):
“We are disappointed that the EPA ignored NFIB’s call for the agency to wait while Sackett v. EPA is pending at the U.S. Supreme Court,” said NFIB President Brad Close. “America’s small farmers, ranchers, developers, contractors, and other small businesses with water on their property have been affected greatly by the ongoing changes to WOTUS standards. This final rule further complicates compliance standards and increases uncertainty for small businesses as they wait to hear from the Supreme Court.
NFIB filed an amicus brief in the case Sackett v. EPA at the U.S. Supreme Court. NFIB’s brief argues the Supreme Court should reverse the lower court’s decision and clarify that the Rapanos plurality provides the proper test for determining the outer bounds of federal authority under the Clean Water Act.
Small Businesses Ask Supreme Court to Resolve ADA Compliance Circuit Split in Petition (12/12/2022)
WASHINGTON, D.C. (Dec. 12, 2022) – NFIB filed a petition for a Writ of Certiorari in the case Acheson Hotels, LLC v. Laufer at the United States Supreme Court. The case concerns the Americans with Disabilities Act (ADA) and whether a self-appointed “tester” has the legal standing under Article III to challenge a business’s accessibility information on its website, even if the tester lacks any intention of visiting that business.
“Across the nation, small businesses work hard to comply with various regulations and compliance requirements, including complying with the Americans with Disabilities Act,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “Unfortunately, small businesses are now at risk of costly litigation due to ‘tester’ lawsuits challenging accessibility issues by those who have no intention to patronize their businesses. We urge the Supreme Court to grant the petition and finally curtail the practice of distant parties weaponizing the ADA to destroy small businesses.”
Business Climate NFIB Files Amicus Brief Supporting Small Businesses’ Right to Arbitration (01/30/2023)
WASHINGTON, D.C. (Jan. 30, 2023) – NFIB filed an amicus brief in the case Coinbase Inc. v. Abraham Bielski at the U.S. Supreme Court disagreeing with the Ninth Circuit’s ruling, which forces parties to simultaneously litigate arbitrable disputes at the trial court during an arbitrability appeal at the court of appeals. NFIB’s brief argues that the right to arbitrate is fundamentally a “right not to litigate the dispute in a court” and instead to have the dispute resolved through arbitration.
“Small businesses benefit from arbitration as an alternative to litigation, as arbitration allows owners to resolve disputes promptly and efficiently,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “Arbitration is often used by small business owners because it is a more cost-effective option compared to costly litigation. We are hopeful that the Supreme Court will agree and reverse the lower court’s ruling.”
The case concerns arbitration cases under the Federal Arbitration Act (FAA). NFIB filed the amicus brief with the U.S. Chamber of Commerce.
The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.
Inflation remains top business problem for small employers (01/10/2023)
WASHINGTON, D.C. (Jan. 10, 2023) – The NFIB Small Business Optimism Index declined 2.1 points in December to 89.8, marking the 12th consecutive month below the 49-year average of 98. Owners expecting better business conditions over the next six months worsened by eight points from November to a net negative 51%. Inflation remains the single most important business problem with 32% of owners reporting it as their top problem in operating their business.
“Overall, small business owners are not optimistic about 2023 as sales and business conditions are expected to deteriorate,” said NFIB Chief Economist Bill Dunkelberg. “Owners are managing several economic uncertainties and persistent inflation and they continue to make business and operational changes to compensate.”
Key findings include:
Forty-one percent of owners reported job openings that were hard to fill, down three points from November but historically very high.
The net percent of owners raising average selling prices decreased eight points to a net 43% (seasonally adjusted), historically high.
The net percent of owners who expect real sales to be higher worsened two points from November to a net negative 10%.
NFIB Statement on Delay of Burdensome IRS $600 Threshold Reporting Requirement Impacting Small Businesses (12/28/2022)
WASHINGTON, D.C. (December 28, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released the following statement regarding the IRS announcement that they will delay the expanded Form 1099-K reporting requirement for annual transactions in excess of $600 from online platforms like eBay, Etsy, Venmo, and CashApp.
“The one-year Administrative delay by the IRS allows small businesses to breathe a sigh of relief from being inundated with new Form 1099-K reporting early next year,” said Vice President of Federal Government Relations Kevin Kuhlman. “The delay provides more time to increase the thresholds and reduce the paperwork burden on small businesses. NFIB urges Congress to continue working to provide relief from this burdensome reporting requirement.”
Inflation Pressures Ease Slightly on Main Street but Remains the Top Business Problem (12/13/2022)
WASHINGTON, D.C. (Dec. 13, 2022) – Inflation remains the top business problem for small business owners, with 32% of owners reporting it as their single most important problem in operating their business, five points lower than July’s highest reading since the fourth quarter of 1979. The Small Business Optimism Index rose 0.6 points in November to 91.9. November’s reading is the 11th consecutive month below the 49-year average of 98.
“Going into the holiday season, small business owners are seeing a slight ease in inflation pressures, but prices remain high,” said NFIB Chief Economist Bill Dunkelberg. “The small business economy is recovering as owners manage an ongoing labor shortage, supply chain disruptions, and historic inflation.”
Small Business Owner Explains Impact of ERTC Benefits, Cancellation (11/22/2022)
WASHINGTON, D.C. (Nov. 22, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released a new video featuring Jerry Akers, a small business owner in Iowa, explaining how his business planned its financial year around the Employee Retention Tax Credit and was negatively impacted by the unexpected cancellation of the credit during the fourth quarter of 2021.
The Employee Retention Tax Credit (ERTC) was created in 2020 to aid small businesses during the COVID-19 pandemic by offering small businesses a tax credit to offset the cost of payroll taxes on employees, thereby enabling small businesses throughout the country to keep their workers employed. Originally, the ERTC was set to expire on January 1, 2022, allowing employers to claim the tax credit for all four quarters of 2021. Unfortunately, on November 15, 2021, the Infrastructure Investment and Jobs Act retroactively moved the ERTC expiration date to October 1, 2021, terminating the fourth quarter tax credit that so many small businesses had been depending on. Read more...
Small Businesses Call for Clear FHA Compliance Rules in Amicus Brief (11/18/2022)
Reyes v. Waples Mobile Home Park concerns Fair Housing Act compliance obligations
WASHINGTON, D.C. (Nov. 18, 2022) – NFIB filed an amicus brief in the case Reyes, et al. v. Waples Mobile Home Park Limited Partnership at the United States Court of Appeals for the Fourth Circuit. The case involves Fair Housing Act (FHA) compliance obligations. NFIB is concerned that the FHA will inhibit small businesses’ ability to establish across-the-board policies to ensure compliance with a wide range of federal criminal statutes.
“Small business owners do their best to comply with various regulations involving their businesses, but the government makes it harder when they constantly change the compliance obligations,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “This Court should make it as easy as possible for businesses to comply with laws like these. We urge the Court to affirm the district court’s judgment and dismiss this action.”
NFIB’s brief argues two main points: 1) a subjective necessity standard would flout the Fifth Amendment and other safeguards against arbitrary criminal liability and 2) imposing a subjective necessity requirement will predictably harm small businesses providing housing and hospitality services, and those in need of housing.
Wages and Benefits Ninety-one percent of owners trying to hire report few or no qualified applicants (02/02/2023)
WASHINGTON, D.C. (Feb. 2, 2023) – According to NFIB’s monthly jobs report, 57% of owners reported hiring or trying to hire in January, up two points. Of those hiring or trying to hire, 91% of owners reported few or no qualified applicants for the positions they were trying to fill. Twenty-seven percent of owners reported few qualified applicants for their open positions and 25% reported none.
“The labor shortage continues to be a major concern for small businesses in the New Year as nearly all owners trying to hire are reporting no or few qualified applicants,” said NFIB Chief Economist Bill Dunkelberg. “Small businesses’ sales opportunities are limited because of the staffing shortage but owners continue to make changes in business operations to compensate.”
Forty-five percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up four points from December.
Labor quality as a top business problem remains elevated (11/03/2022)
WASHINGTON, D.C. (Nov. 3, 2022) – According to NFIB’s monthly jobs report, small business owners continue to struggle with labor issues as 23% of owners report labor quality as their top business problem, second to inflation. Ten percent of owners report labor cost as their top business problem, a historically high reading.
“The labor shortage remains a challenging problem for small business owners,” said NFIB Chief Economist Bill Dunkelberg. “Because of staffing shortages, small business owners are less able to take full advantage of current sales opportunities and continue to make business adjustments to compensate.”
Small business owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 20% planning to create new jobs in the next three months, down three points from September but still historically strong.
Sixty-one percent of owners reported hiring or trying to hire in October, down three points from September. Of those hiring or trying to hire, 90% of owners reported few or no qualified applicants for the positions they were trying to fill. For all firms, including those not actively hiring, 30% of owners reported few qualified applicants for their open positions and 25% reported none.
Seasonally adjusted, a net 44% reported raising compensation, down one point from September but just six points below the 48-year record high set in January....
Small business owners explain how staffing shortages are impacting their businesses (10/12/2022)
WASHINGTON, D.C. (Oct. 12, 2022) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released a new video today featuring small business owners from across the nation discussing how staffing shortages are impacting their businesses.
Forty-six percent of small business owners reported job openings they could not fill in the current period, according to NFIB’s monthly jobs report. Owners reporting labor quality as their top business problem remains elevated at 22% and 10% of owners reported labor cost as their single most important problem.
NFIB webinar explains the employment process to help recruit and retain workers (06/14/2022)
On June 1, the “Hiring & Retaining the Best Talent in a Tight Labor Market: HR Basics for Small Business” webinar was hosted by Senior Executive Counsel for the NFIB Small Business Legal Center Elizabeth Milito and Executive Director for the NFIB Research Center Holly Wade.
NFIB’s research shows that small business owners are struggling with workforce shortages. Forty-seven percent of small business owners are reporting they have job openings they could not fill, and an NFIB survey shows expectations for better business conditions in six months is the lowest it’s been in the nearly 50-year survey.
“While the last two years really demonstrated how resilient and important small businesses are to our economy, I would say that small businesses run America, the pandemic also showed some inefficiencies and deficiencies in businesses,” Milito explained. “Small business and larger businesses too, particularly when it comes to issues related to recruitment and retention of employees.”
For small business owners, it is important to re-examine the processes that are being used for recruiting employees and finding new and effective ways to retain employees.
House Democrats Introduce Bill To Require Companies Provide Time Off For Voting (04/19/2022)
Reuters (4/11, Warburton) reported House Democrats on Monday “proposed legislation requiring employers give their workers paid time off to vote, following failed attempts by Congress to pass major voting rights legislation earlier this year.” In a statement, Rep. Nikema Williams (D-GA) said that the “Time Off to Vote Act” would help states reduce lines at polling places, while Rep. Andy Levin (D-MI) said it would “ensure no worker has to sacrifice their wages or jeopardize their job security to exercise their sacred right to vote.”
Research: 3M Americans Unwilling To Return To Pre-Pandemic Work (04/19/2022)
The Wall Street Journal (4/16, Mitchell, Subscription Publication) reported new research shows 3 million Americans who quit work during the coronavirus pandemic do not plan to return to pre-pandemic activities even after all restrictions are lifted. According to researchers, these people tend to be women, lack a college degree, and work in low-paying jobs. Th Journal warned that the persistence of “long social distancing” means the labor force is unlikely to bounce back to pre-pandemic levels.
