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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.
I am not going to get into the intricacies of that form here or the Form 941 and all the payroll things because that's the things your CPA must fret about. In this video I wish to tell you what you require 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?" You can be informed and take ownership of your own tax scenarios, of your company's tax situation to produce more money circulation in your organization and more wealth for yourself.
Assistance supplied can include:
Devoted professionals that will certainly translate extremely complicated program rules as well as will be offered to address your questions, including:
What period does the program cover?
Albany NY Employee Retention Program
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.
Exactly How It Works
This is big, a lot of small company owners do not learn about this, or they've become aware of it, however they don't understand much about it, even numerous tax experts don't understand the ins and outs of this thing because it's new and a great deal of these changes
that are useful to company owner took place in the middle of tax season. In this video I'm going to dig into the employee retention credit, why it's so rewarding now in 2021, more lucrative, far more rewarding, in reality now than it was in 2020, 5x more rewarding at least. Even if you don't own a service, be sure to share this video with service owners you know, this video might literally be worth tens of thousands of dollars for them. And if you are a company owner and after you enjoy this video you desire to talk with me and a member of my team, who will likewise be either a CPA like myself or an EA, shoot me an e-mail, [email protected], tell me a little about your service and your ballpark year-over-year earnings, 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 reducing your needed work 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. I am not going to get into the intricacies of that form here or the Form 941 and all the payroll things because that's the things your CPA must fret about. In this video I wish to tell you what you require 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?" You can be informed and take ownership of your own tax scenarios, of your company's tax situation to produce more money circulation in your organization and more wealth for yourself.
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About Employee Retention Program
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 absolutely nothing in this video is to be taken as legal or tax suggestions, this video is for basic informational purposes just, yes, I am a CPA and a tax expert, but I am not your CPA nor your tax professional unless you have actually engaged my company. Another disclaimer here, for functions of this video I am presuming that if you're enjoying this you are a small company owner, which for employee retention credit functions indicates one hundred or fewer staff members for purposes of the 2020 credit and five hundred or fewer staff members for purposes of the 2021 credit, if you have a business with over 5 hundred workers I picture you have in-house counsel, in-house CPAs who are on top of this stuff, but I'm here for you small business owners who may work with a local tax professional who is so neck-deep in tax returns today due to the fact that the government extended the tax deadline to May 17 or volume is simply the nature of their company 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 business owners in 2021 and why weren't we talking about it in 2020, it's been around since then, since the CARES Act? Yes, the employee retention credit has been around because 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 due to the fact that of the PPP, the Paycheck Protection Program.
Basically the employee retention credit had a glow-up between 2020 and 2021, it went from the unpopular lady with neglected 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 Program
Factor, the employee retention credit for both 2020 and 2021 is now readily available to PPP recipients, but of course you can't double dip. You can't get PPP for the hundred thousand dollars you paid your workers and then turn around and claim the employee retention credit on those salaries. The federal government doesn't look too fondly on paying your payroll for you through the PPP and after that you claiming a credit versus the taxes you pay the government on those earnings that the government spent for you. So that makes sense. Now, there's some planning here. 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 best covered period that will get you full PPP forgiveness however likewise optimize your employee retention credit.
For PPP forgiveness, you desire to fill up that payroll bucket with as lots of expenses as possible that don't count for employee retention credit purposes. For instance, you can't declare the employee retention credit on state unemployment insurance coverage contributions, however state unemployment insurance coverage contributions count toward PPP forgiveness, see? You 'd want to discard all your state unemployment insurance contributions on your PPP forgiveness application to leave as much common incomes as possible to take the employee retention credit on.
Another thing to note is you can't subtract the incomes you declared the employee retention credit on, and that makes sense as well, why should the government give you a deduction for these earnings that they already offered you a credit for? Alright, sorry for getting a little sidetracked there, I just enjoy talking about this things, but let's talk about another factor why the employee retention credit is more appealing now than it was last year, and that is that it's simpler to certify for the employee retention credit in 2021.
In 2021, for a quarter to certify for the employee retention credit, you just need to show a 20% decrease in gross receipts compared to the exact same calendar quarter in 2019. So this suggests even more companies will certify. My organization, for example, experienced a 26% decline in gross receipts, comparing Q1 2019 to Q1 2021, and it was a comparable story in 2015 too.
I didn't qualify for the 2020 employee retention credit initially, since I got first round of PPP money and second due to the fact that my business didn't suffer that large 50% decline needed to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my organization certifies. Also, for 2021, for any quarter, you can elect to use the lookback quarter, implying that, for example, even if your Q1 2021 gross receipts aren't a minimum of 20% lower than your Q1 2019 gross invoices, you can compare for functions of identifying eligibility for the employee retention credit for Q1 2021, you can compare Q4 2020 to Q4 2019. Implication here is that if you certify for Q1 2021 based upon Q1 2021's gross receipts, you will also qualify for Q2 2021 since you qualified in the lookback quarter of Q1 2021.
Very same thing for Q2 to Q3 and Q3 to Q4, so essentially if you just get approved for Q1 and Q3 2021, you likewise get approved for Q2 and Q4 based upon the lookback. Even if you didn't have an adequate decrease in revenue, you can certify for the employee retention credit if you were required to totally or partly suspend operations in your organization throughout any calendar quarter in 2020 or 2021 due to state or federal orders, in which case you are eligible for the employee retention credit during that duration of full or partial shutdown.
Common example, you own a restaurant, and your governor signed an executive order specifying that you need to close down indoor dining. That is an example of a partial shutdown. Not just are more organizations qualified for the employee retention credit thanks to these brand-new laws, making PPP receivers eligible for the employee retention credit though not on the very same salaries and making more services eligible through the 20% decrease threshold rather than the 50% decline threshold, however the 2021 credit is also more profitable than the 2020 credit.
This is due to the fact that for 2020, the employee retention credit amounted to 50% of all qualified wages for 2020, the employee retention credit amounted to 50% of all certified wages you paid staff members between March 12, 2020, and December 31, 2020, with a limitation of $10,000 in salaries for that whole period. So the maximum 2020 credit per worker was $5,000. Okay, however that's nothing compared to the 2021 credit because for 2021, the credit amounts to 70% of certified wages per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in earnings per employee ... for that whole period? No. Per quarter. So for 2021 the portion is more (70% in 2021 vs. 50% in 2020) and you can take it on as much as $10,000 in earnings per employee per quarter, so we're discussing an optimum credit of $7,000 per staff member per quarter. If you're qualified all 4 quarters, $7,000 times 4 is $28,000. That's right, folks, the maximum 2021 employee retention credit is $28,000 per employee. That's substantial. That's a blessing to lots of entrepreneur right now. You see what I indicate now, right, how the employee retention credit has gone from ugly duckling in 2020 to gorgeous swan in 2021? And by the method, by the method, certified salaries includes employer-paid health insurance premiums.
If you got PPP and you are qualified for the employee retention credit, then when you do your PPP forgiveness application, you require to choose the finest covered period that will get you complete PPP forgiveness however also maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just like talking about this things, however let's talk about another factor why the employee retention credit is more appealing now than it was last year, and that is that it's simpler to certify for the employee retention credit in 2021. I didn't qualify for the 2020 employee retention credit first, since I got first round of PPP cash and 2nd because my organization didn't suffer that large 50% decline required to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my organization certifies. Not just are more organizations eligible for the employee retention credit thanks to these brand-new laws, making PPP receivers eligible for the employee retention credit though not on the exact same incomes and making more companies eligible through the 20% decline threshold rather than the 50% decrease threshold, but the 2021 credit is likewise more financially rewarding than the 2020 credit.
Not bad, however that's absolutely nothing compared to the 2021 credit because for 2021, the credit is equal to 70% of certified wages per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in salaries per employee ... for that whole time period?
How to Begin
The most effective method is to deal with a no-risk, contingency-based expense savings firm. That will certainly discuss in support of their clients to get the most effective costs possible for their existing clients. They will certainly examine old billings for errors getting their customers refunds as well as tax credits. They can boost the productivity and also general assessment of their customers organizations.
Assistance supplied can include:
Devoted professionals that will certainly translate extremely complicated program rules as well as will be offered to address your questions, including:
How does the PPP financing aspect into the ERC?
What are the distinctions in between the 2020 and also 2021 programs and also exactly how does it apply to your service?
What are gathering regulations for bigger, multi-state employers, as well as how do I translate several states executive orders?
How do part-time, Union, and also tipped workers influence the amount of my reimbursements?
Extensive evaluation regarding your qualification
Comprehensive evaluation of your claim
Assistance on the asserting process and paperwork
Certain program knowledge that a normal CPA or payroll cpu could not be well-versed in
Smooth as well as rapid end-to-end process, from qualification to declaring and also receiving reimbursements
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| 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 Start? Its Simple.
1. Whichever business you pick to work with will figure out whether your organization certifies for the ERC.
2. They will analyze your case and also calculate the optimum quantity you can obtain.
3. Their group overviews you through the claiming procedure, from starting to end, including proper documents.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program began on March 13th, 2020 and right on September 30, 2021, for eligible businesses.
You can make an application for refunds for 2020 and also 2021 after December 31st of this year, right into 2022 and also 2023. And also potentially beyond then too.
Many organizations have received refunds, as well as others, along with refunds, also qualified to continue getting ERC in every pay-roll they refine through December 31, 2021, at around 30% of their payroll expense.
Some services have received refunds from $100,000 to $6 million.
Do we still qualify if we currently took the PPP?
Yes. Under the Consolidated Appropriations Act, businesses can now qualify for the ERC even if they already got a PPP funding. Note, however, that the ERC will just put on wages not used for the PPP.
Do we still accredit if we did not incur a 20% decrease in gross receipts .
A government authority called for full or partial shutdown of your service during 2020 or 2021. This includes your operations being limited by commerce, failure to take a trip or restrictions of group conferences.
- Gross receipt reduction requirements is different for 2020 as well as 2021, yet is determined against the present quarter as contrasted to 2019 pre-COVID amounts:
- A federal government authority required partial or full closure 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 invoice reduction standards is different for 2020 and also 2021, but is measured against the present quarter as compared to 2019 pre-COVID amounts.
Do we still certify if we stayed open during the pandemic?
Yes. To certify, your company should fulfill either one of the adhering to standards:
- Experienced a decline in gross receipts by 20%, or
- Needed to transform business operations due to federal government orders
Lots of products are taken into consideration as changes in company operations, consisting of shifts in job duties and also the purchase of additional protective tools.