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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 supplied can include:
Committed specialists that will analyze very complex program guidelines and also will certainly be readily available to answer your questions, including:
What period does the program cover?
Bayside NY Employee Retention 2021 Ertc 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.
How It Works
Even if you don't own a company, be sure to share this video with company owners you know, this video might actually be worth tens of thousands of dollars for them. And if you are a business owner and after you watch this video you desire to talk with me and a member of my group, 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 profits, and let's see if we can get some more cash back in your pocket due to the fact that 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 need to stress about, I am not going to get into the complexities of that kind here or the Form 941 and all the payroll stuff. In this video I wish to inform you what you need to understand so you can go to your CPA and state, "Hey, what about this employee retention credit, why have not you told me about this?" You can be notified and take ownership of your own tax scenarios, of your business's tax circumstance to create more cash flow in your service and more wealth for yourself.
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About Employee Retention 2021 Ertc Qualifications
Alright, now let's dig into this and let's speak about the employee retention credit or the ERC as some folks like to call it, before I enter this, I want to say that nothing in this video is to be taken as legal or tax recommendations, this video is for basic informational purposes only, 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 as such. Another disclaimer here, for functions of this video I am presuming that if you're seeing this you are a small company owner, which for employee retention credit functions means one hundred or fewer staff members for functions of the 2020 credit and five hundred or less workers for purposes of the 2021 credit, if you have a company with over 5 hundred workers I picture you have in-house counsel, in-house CPAs who are on top of this things, however I'm here for you small company owners who might work with a regional tax professional who is so neck-deep in tax returns right now since the government extended the tax due date to May 17 or volume is simply the nature of their service that your tax professional hasn't had the time to go into the weeds here like I have.
So employee retention credit, why is it so lucrative for entrepreneur in 2021 and why weren't we speaking about it in 2020, it's been around ever since, because the CARES Act? Why is it getting all this buzz now that it wasn't last year? Well, let's back it up. Yes, the employee retention credit has been around given that the CARES Act that was passed over a year ago in March 2020, but the employee retention credit didn't get much love in 2015 in 2020 since of the PPP, the Paycheck Protection Program. Originally, in 2020, if you received a PPP loan as a company, you were not qualified for the employee retention credit.
Essentially the employee retention credit had a glow-up in between 2020 and 2021, it went from the unpopular lady with thick glasses and neglected eyebrows and her hair up in 2020 to the belle of the ball for business owners in 2021. Why is the employee retention credit more attractive now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act?
Why Employee Retention 2021 Ertc Qualifications
First reason, the employee retention credit for both 2020 and 2021 is now readily available to PPP receivers, however naturally you can't double dip. You can't get PPP for the hundred thousand dollars you paid your staff members and then turn around and declare the employee retention credit on those incomes. 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 federal government on those incomes that the federal government paid for you. 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 require to choose the very best covered period that will get you complete PPP forgiveness but likewise optimize your employee retention credit.
Also, for PPP forgiveness, you wish to fill that payroll container with as lots of costs as possible that do not count for employee retention credit purposes. You can't claim the employee retention credit on state joblessness insurance contributions, however state joblessness insurance contributions count toward PPP forgiveness, see? You 'd want to dispose all your state unemployment insurance coverage contributions on your PPP forgiveness application to leave as much ordinary incomes as possible to take the employee retention credit on.
This can get really technical really quickly and it's really scenario specific in terms of optimizing PPP vs. ERC and my company has tools to figure this things out for you, I'm not going to dig into all that here, but just understand that you really have to do the mathematics when doing your PPP forgiveness to make sure you're not leaving anything on the table in terms of the employee retention credit. Another thing to note is you can't subtract the incomes you declared the employee retention credit on, which makes sense also, why should the government offer you a deduction for these earnings that they currently gave you a credit for? So basically the credit is tax-effected. Alright, sorry for getting a little sidetracked there, I just love talking about this things, but let's discuss another reason that the employee retention credit is more attractive now than it was last year, which is that it's simpler to receive the employee retention credit in 2021. In 2020, for a quarter to receive the employee retention credit, you needed to reveal a 50% decline in gross receipts compared to the same calendar quarter in 2019.
In 2021, for a quarter to qualify for the employee retention credit, you just need to show a 20% decrease in gross receipts compared to the same calendar quarter in 2019. This implies far more services will qualify. My business, for instance, experienced a 26% decrease in gross invoices, comparing Q1 2019 to Q1 2021, and it was a comparable story last year too.
So I didn't certify for the 2020 employee retention credit initially, because I got very first round of PPP money and 2nd because my business didn't suffer that large 50% decline required to get approved for the employee retention credit last year.But for 2021, at least for Q1, yeah, my company certifies. Likewise, for 2021, for any quarter, you can elect to use the lookback quarter, meaning that, for instance, even if your Q1 2021 gross receipts aren't at least 20% lower than your Q1 2019 gross receipts, you can compare for functions of identifying eligibility for the employee retention credit for Q1 2021, you can compare Q4 2020 to Q4 2019. Ramification here is that if you get approved for Q1 2021 based on Q1 2021's gross receipts, you will also get approved for Q2 2021 given that you certified in the lookback quarter of Q1 2021.
Same thing for Q2 to Q3 and Q3 to Q4, so generally if you just get approved for Q1 and Q3 2021, you also get approved for Q2 and Q4 based upon the lookback. Also, even if you didn't have a sufficient decline in revenue, you can get approved for the employee retention credit if you were needed to fully or partly suspend operations in your business 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 during that period of partial or full shutdown.
Typical example, you own a dining establishment, and your guv signed an executive order specifying that you require to close down indoor dining. That is an example of a partial shutdown. Likewise, not just are more businesses 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 exact same salaries and making more businesses eligible through the 20% decrease threshold rather than the 50% decrease threshold, however the 2021 credit is likewise more rewarding than the 2020 credit.
Not bad, however that's absolutely nothing compared to the 2021 credit due to the fact that for 2021, the credit is equal to 70% of qualified wages per employee paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in earnings per employee ... for that whole time duration? For 2021 the percentage 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 staff member per quarter. That's right, folks, the maximum 2021 employee retention credit is $28,000 per employee.
If you got PPP and you are qualified for the employee retention credit, then when you do your PPP forgiveness application, you need to choose the finest covered duration that will get you complete PPP forgiveness but also optimize 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 reason why the employee retention credit is more appealing now than it was last year, and that is that it's simpler to qualify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit first, due to the fact that I got first round of PPP money and second because my business didn't suffer that large 50% decrease required to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my business certifies. Not just are more services qualified for the employee retention credit thanks to these new laws, making PPP recipients eligible for the employee retention credit though not on the same salaries and making more businesses eligible through the 20% decrease limit rather than the 50% decline limit, but the 2021 credit is likewise more rewarding than the 2020 credit.
Not bad, however that's nothing compared to the 2021 credit because for 2021, the credit is equal to 70% of certified salaries per worker paid from January 1, 2021 through December 31, 2021, limited to $10,000 in wages per staff member ... for that entire time duration?
Exactly How to Get going
The most effective way is to collaborate with a no-risk, contingency-based cost savings firm. That will negotiate in behalf of their clients to obtain the very best rates feasible for their existing clients. They will investigate old invoices for mistakes obtaining for their clients refunds and also credits. They can enhance the profitability and overall valuation of their customers organizations.
Assistance supplied can include:
Committed specialists that will analyze very complex program guidelines and also will certainly be readily available to answer your questions, including:
Just how does the PPP finance element into the ERC?
What are the distinctions between the 2020 as well as 2021 programs as well as just how does it use to your company?
What are aggregation policies for larger, multi-state employers, and just how do I analyze numerous states executive orders?
Exactly how do part-time, Union, as well as tipped employees impact the amount of my refunds?
Thorough analysis concerning your qualification
Detailed evaluation of your situation
Support on the asserting process and also documentation
Particular program experience that a routine CPA or pay-roll cpu might not be well-versed in
Rapid and also smooth end-to-end procedure, from qualification to declaring and getting 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 Obtain Begun? Its Simple.
1. Whichever company you select to work with will establish whether your organization certifies for the ERC.
2. They will analyze your request and also calculate the optimum quantity you can get.
3. Their team overviews you through the asserting procedure, from beginning to end, consisting of appropriate paperwork.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program began on March 13th, 2020 and also right on September 30, 2021, for eligible organizations.
You can get refunds for 2020 and also 2021 after December 31st of this year, into 2022 and 2023. And potentially past then also.
Many businesses have received reimbursements, and others, in enhancement to refunds, also certified to proceed obtaining ERC in every pay-roll they process through December 31, 2021, at about 30% of their pay-roll cost.
Some services have gotten reimbursements from $100,000 to $6 million.
Do we still qualify if we currently took the PPP?
Yes. Under the Consolidated Appropriations Act, organizations can now get the ERC even if they already got a PPP funding. Note, however, that the ERC will only use to wages not made use of for the PPP.
maintain a 20% decrease in gross billings .
A government authority needed complete or partial closure of your business during 2020 or 2021. This includes your operations being limited by business, lack of ability to travel or limitations of team meetings.
- Gross invoice reduction criteria is various for 2020 and 2021, however is measured against the present quarter as compared to 2019 pre-COVID quantities:
- A government authority required partial or full shutdown of your company throughout 2020 or 2021. This includes your operations being limited by commerce, failure to travel or constraints of team meetings.
- Gross receipt reduction criteria is various for 2020 and also 2021, yet is gauged against the existing quarter as contrasted to 2019 pre-COVID quantities.
Do we still certify if we continued to be open throughout the pandemic?
Yes. To qualify, your company has to satisfy either among the complying with criteria:
- Experienced a decrease in gross invoices by 20%, or
- Needed to change organization operations because of federal government orders
Numerous items are considered as modifications in organization operations, consisting of changes in job functions and the purchase of extra safety equipment.