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Alright, everybody, so the SBA this week came out and said that it has stopped accepting new PPP applications from most lenders. The SBA informed lenders this past Tuesday that the PPP general fund was out of money and that the only remaining funds available for new applications are $8 billion set aside for community financial institutions (CFIs), which are institutions that specifically work with businesses in underserved communities. But all is not lost, dear small business owners of America. If you missed out on the PPP or if you did not qualify for the PPP, don't lose hope because you may still qualify for the employee retention credit on all those wages you didn't claim for PPP forgiveness, and this employee retention credit could be worth up to $28,000 per employee. And yes, even if you got PPP money, you can still get a piece of this employee retention credit cake.
Assistance provided can include:
Dedicated professionals that will certainly interpret highly complicated program guidelines and also will be available to answer your inquiries, including:
What duration does the program cover?
Albany NY Employee Retention 2021 Erc Qualifications
Alright, everybody, so the SBA this week came out and said that it has stopped accepting new PPP applications from most lenders. The SBA informed lenders this past Tuesday that the PPP general fund was out of money and that the only remaining funds available for new applications are $8 billion set aside for community financial institutions (CFIs), which are institutions that specifically work with businesses in underserved communities. But all is not lost, dear small business owners of America. If you missed out on the PPP or if you did not qualify for the PPP, don't lose hope because you may still qualify for the employee retention credit on all those wages you didn't claim for PPP forgiveness, and this employee retention credit could be worth up to $28,000 per employee. And yes, even if you got PPP money, you can still get a piece of this employee retention credit cake.
Just how It Works
Even if you do not own a company, be sure to share this video with business owners you know, this video could actually be worth tens of thousands of dollars for them. And if you are a service owner and after you see this video you want to talk with me and a member of my group, who will also be either a CPA like myself or an EA, shoot me an e-mail, [email protected], inform me a little about your business and your ballpark year-over-year income, and let's see if we can get some more cash back in your pocket because you can take this credit against your payroll taxes you pay by minimizing your required employment tax deposits or you can ask for an advance payment of the credit using IRS Form 7200, Advance Payment of Employer Credits Due to COVID-19.
Since that's the things your CPA should fret about, I am not going to get into the complexities of that kind here or the Form 941 and all the payroll things. In this video I want to inform you what you need to know so you can go to your CPA and say, "Hey, what about this employee retention credit, why haven't you informed me about this?" so you can be notified and take ownership of your own tax circumstances, of your organization's tax situation to produce more cash flow in your business and more wealth for yourself.
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About Employee Retention 2021 Erc Qualifications
Alright, now let's dig into this and let's talk about the employee retention credit or the ERC as some folks like to call it, before I get into this, I want to say that nothing in this video is to be taken as legal or tax guidance, this video is for general informative purposes only, yes, I am a tax and a certified public accountant professional, however I am not your CPA nor your tax expert unless you have engaged my company. Another disclaimer here, for functions of this video I am assuming that if you're viewing this you are a small company owner, which for employee retention credit purposes indicates one hundred or less staff members for functions of the 2020 credit and 5 hundred or fewer workers for purposes of the 2021 credit, if you have a business with over 5 hundred staff members I imagine you have in-house counsel, in-house CPAs who are on top of this stuff, but I'm here for you small company owners who may work with a local tax specialist who is so neck-deep in income tax return right now since the government extended the tax deadline to May 17 or volume is just the nature of their service that your tax specialist hasn't had the time to dig into the weeds here like I have.
Employee retention credit, why is it so profitable for organization owners in 2021 and why weren't we talking about it in 2020, it's been around given that then, considering that the CARES Act? Yes, the employee retention credit has been around since the CARES Act that was passed over a year ago in March 2020, but the employee retention credit didn't get much love last year in 2020 since of the PPP, the Paycheck Protection Program.
Generally the employee retention credit had a glow-up in between 2020 and 2021, it went from the unpopular lady with unkempt eyebrows and thick glasses and her hair up in 2020 to the belle of the ball for service owners in 2021. Why is the employee retention credit more appealing now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act?
Why Employee Retention 2021 Erc Qualifications
Reason, the employee retention credit for both 2020 and 2021 is now available to PPP receivers, but of course you can't double dip. You can't get PPP for the hundred thousand dollars you paid your employees and then turn around and declare the employee retention credit on those earnings. If you got PPP and you are qualified for the employee retention credit, then when you do your PPP forgiveness application, you need to select the finest covered duration that will get you full PPP forgiveness however likewise optimize your employee retention credit.
Also, for PPP forgiveness, you want to fill that payroll bucket with as numerous expenses as possible that don't count for employee retention credit functions. You can't declare the employee retention credit on state joblessness insurance contributions, but state joblessness insurance coverage contributions count towards PPP forgiveness, see? So you 'd wish to dispose all your state joblessness insurance contributions on your PPP forgiveness application to leave as much common wages as possible to take the employee retention credit on.
Another thing to note is you can't subtract the wages you claimed the employee retention credit on, and that makes sense as well, why should the government provide you a reduction for these salaries that they currently provided you a credit for? Alright, sorry for getting a little sidetracked there, I just enjoy talking about this stuff, but let's talk about another reason why the employee retention credit is more appealing now than it was last year, and that is that it's easier to qualify for the employee retention credit in 2021.
However in 2021, for a quarter to certify for the employee retention credit, you only need to reveal a 20% reduction in gross invoices compared to the exact same calendar quarter in 2019. So this indicates much more businesses will certify. My company, for example, experienced a 26% decline in gross receipts, comparing Q1 2019 to Q1 2021, and it was a similar story in 2015 too.
I didn't certify for the 2020 employee retention credit first, because I got first round of PPP money and second because my service didn't suffer that large 50% decrease needed to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my company qualifies. For 2021, for any quarter, you can choose to use the lookback quarter, suggesting that, for example, even if your Q1 2021 gross receipts aren't at least 20% lower than your Q1 2019 gross receipts, you can compare for purposes of determining eligibility for the employee retention credit for Q1 2021, you can compare Q4 2020 to Q4 2019. Ramification here is that if you certify for Q1 2021 based upon Q1 2021's gross receipts, you will likewise get approved for Q2 2021 given that you certified in the lookback quarter of Q1 2021.
Very same thing for Q2 to Q3 and Q3 to Q4, so basically if you simply get approved for Q1 and Q3 2021, you likewise receive Q2 and Q4 based on the lookback. Likewise, even if you didn't have a sufficient decline in earnings, you can receive the employee retention credit if you were needed to completely or partially suspend operations in your service throughout any calendar quarter in 2020 or 2021 due to state or federal orders, in which case you are qualified for the employee retention credit throughout that period of partial or complete shutdown.
Typical example, you own a restaurant, and your governor signed an executive order mentioning that you need to shut down indoor dining. That is an example of a partial shutdown. Also, not just are more businesses eligible for the employee retention credit thanks to these brand-new laws, making PPP recipients qualified for the employee retention credit though not on the very same salaries and making more organizations eligible through the 20% decrease limit rather than the 50% decline limit, but the 2021 credit is also more rewarding than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit because for 2021, the credit is equivalent to 70% of qualified salaries per worker paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in wages per employee ... for that whole time period? For 2021 the portion is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in incomes per staff member per quarter, so we're talking about an optimum credit of $7,000 per worker per quarter. That's right, folks, the optimum 2021 employee retention credit is $28,000 per staff member.
If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you need to pick the finest covered duration that will get you full PPP forgiveness but likewise optimize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I simply like talking about this things, however let's talk about another reason why the employee retention credit is more attractive now than it was last year, and that is that it's easier to certify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit first, since I got very first round of PPP cash and 2nd because my service didn't suffer that big 50% decrease needed to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my company qualifies. Not just are more companies qualified for the employee retention credit thanks to these brand-new laws, making PPP recipients qualified for the employee retention credit though not on the same earnings and making more services eligible through the 20% decrease limit rather than the 50% decline limit, however the 2021 credit is also more rewarding than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit since for 2021, the credit is equivalent to 70% of certified incomes per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in wages per staff member ... for that whole time period?
Exactly How to Begin
The most effective way is to deal with a no-risk, contingency-based expense financial savings company. That will certainly work out in behalf of their customers to get the most effective rates feasible for their existing customers. They will investigate old invoices for errors getting their clients reimbursements and credits. They can raise the profitability and also overall evaluation of their customers companies.
Assistance provided can include:
Dedicated professionals that will certainly interpret highly complicated program guidelines and also will be available to answer your inquiries, including:
How does the PPP financing variable right into the ERC?
What are the distinctions between the 2020 and 2021 programs and how does it put on your company?
What are gathering rules for bigger, multi-state companies, and just how do I analyze several states executive orders?
Just how do part-time, Union, and tipped workers influence the quantity of my reimbursements?
Thorough examination concerning your eligibility
Detailed evaluation of your case
Guidance on the claiming procedure as well as documentation
Specific program competence that a normal CPA or pay-roll processor could not be well-versed in
Smooth and fast end-to-end procedure, from qualification to asserting as well as obtaining refunds
| Adams Brown Strategic Allies and CPAs https://www.adamsbrowncpa.com/ertc-tax-credit-consulting-new-york/ |
| Finance Pro Plus https://www.financeproplus.com/ |
| Bottom Line Concepts https://erc.bottomlinesavings.com/ |
| Equifax Workforce Solutions https://workforce.equifax.com/solutions/employee-retention-credit |
| Valiant Capital https://erc.valiant-capital.com/ |
| NYC Business https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program |
| Omega Funding solutions https://www.omegafundingsolutions.com/ |
| Disisaster Loan Advisors https://www.disasterloanadvisors.com/ |
| ERTC Filing https://info.ertcfiling.com/employee-retention-tax-credit-new-york-11368/ |
Prepared To Get Going? Its Simple.
1. Whichever business you choose to work with will identify whether your company certifies for the ERC.
2. They will certainly assess your request and also calculate the maximum quantity you can get.
3. Their team overviews you with the claiming process, from starting to finish, including correct paperwork.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program began on March 13th, 2020 and right on September 30, 2021, for eligible organizations.
You can request reimbursements for 2020 as well as 2021 after December 31st of this year, right into 2022 and 2023. As well as possibly beyond then too.
Many companies have received reimbursements, and also others, in enhancement to reimbursements, also certified to continue obtaining ERC in every payroll they refine to December 31, 2021, at about 30% of their pay-roll cost.
Some services have actually obtained refunds from $100,000 to $6 million.
Do we still qualify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, businesses can now qualify for the ERC even if they already got a PPP lending. Note, however, that the ERC will only relate to incomes not utilized for the PPP.
Do we still certify if we did not) sustain a 20% decline in gross receipts .
A federal government authority needed complete or partial closure of your service throughout 2020 or 2021. This includes your procedures being limited by business, lack of ability to travel or constraints of group conferences.
- Gross invoice decrease requirements is various for 2020 and 2021, but is measured versus the existing quarter as compared to 2019 pre-COVID quantities:
- A government authority called for partial or full shutdown of your service during 2020 or 2021. This includes your procedures being restricted by business, failure to take a trip or restrictions of team meetings.
- Gross receipt reduction criteria is various for 2020 and 2021, however is gauged versus the existing quarter as compared to 2019 pre-COVID quantities.
Do we still certify if we stayed open throughout the pandemic?
Yes. To certify, your organization must meet either among the complying with criteria:
- Experienced a decline in gross receipts by 20%, or
- Had to alter company procedures as a result of federal government orders
Lots of items are thought about as adjustments in organization procedures, including changes in work roles as well as the acquisition of added safety tools.