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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.
Solutions provided can include:
Devoted experts that will analyze very complex program guidelines and also will certainly be available to answer your concerns, including:
What duration does the program cover?
Bayside NY Employee Retention Credit For Self Employed
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 don't own a business, be sure to share this video with company owners you know, this video could actually be worth 10s of thousands of dollars for them. And if you are an organization owner and after you enjoy this video you desire to talk with me and a member of my team, who will also be either a CPA like myself or an EA, shoot me an email, [email protected], inform me a little about your business and your ballpark year-over-year earnings, and let's see if we can get some more money back in your pocket because you can take this credit against your payroll taxes you pay by lowering your needed work tax deposits or you can ask for an advance payment of the credit utilizing IRS Form 7200, Advance Payment of Employer Credits Due to COVID-19.
I am not going to get into the complexities of that form here or the Form 941 and all the payroll things since that's the things your CPA need to fret about. In this video I desire to inform you what you require to know so you can go to your CPA and say, "Hey, what about this employee retention credit, why have not you informed me about this?" You can be notified and take ownership of your own tax scenarios, of your company's tax situation to generate more money flow in your business and more wealth for yourself.
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About Employee Retention Credit For Self Employed
Alright, now let's go 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 wish to say that nothing in this video is to be taken as legal or tax suggestions, this video is for basic educational functions only, yes, I am a tax and a certified public accountant expert, but I am not your CPA nor your tax expert unless you have engaged my firm as such. Another disclaimer here, for purposes 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 less staff members for functions of the 2020 credit and 5 hundred or fewer workers for functions of the 2021 credit, if you have a company with over five 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 may work with a local tax professional who is so neck-deep in income tax return today due to the fact that the federal government extended the tax deadline to May 17 or volume is just the nature of their business that your tax professional hasn't had the time to dig into the weeds here like I have.
Employee retention credit, why is it so rewarding for service owners in 2021 and why weren't we talking about it in 2020, it's been around given that then, since the CARES Act? Yes, the employee retention credit has actually been around because the CARES Act that was passed over a year ago in March 2020, however 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 between 2020 and 2021, it went from the unpopular girl with thick glasses and unkempt eyebrows and her hair up in 2020 to the belle of the ball for company 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 Credit For Self Employed
Very first factor, the employee retention credit for both 2020 and 2021 is now readily available to PPP receivers, but 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 earnings. The federal government does not look too fondly on paying your payroll for you through the PPP and then you declaring a credit versus the taxes you pay the government on those incomes that the government paid for you. So that makes good sense. Now, there's some planning here. 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 best covered duration that will get you complete PPP forgiveness but likewise maximize your employee retention credit.
For PPP forgiveness, you want to fill up that payroll pail with as numerous expenses as possible that do not count for employee retention credit purposes. You can't claim the employee retention credit on state joblessness insurance coverage contributions, but state unemployment insurance coverage contributions count toward PPP forgiveness, see? You 'd want to dump all your state joblessness insurance coverage contributions on your PPP forgiveness application to leave as much normal incomes as possible to take the employee retention credit on.
Another thing to note is you can't deduct the wages you claimed the employee retention credit on, and that makes sense as well, why should the government offer you a reduction for these incomes that they currently offered you a credit for? Alright, sorry for getting a little sidetracked there, I just love talking about this things, but let's talk about another factor why the employee retention credit is more attractive now than it was last year, and that is that it's much easier to qualify for the employee retention credit in 2021.
In 2021, for a quarter to qualify for the employee retention credit, you just require to reveal a 20% reduction in gross invoices compared to the exact same calendar quarter in 2019. So this suggests far more companies will qualify. My company, for instance, experienced a 26% decline in gross invoices, 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 cash and second due to the fact that my company didn't suffer that big 50% decrease needed to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my service qualifies. For 2021, for any quarter, you can elect to use the lookback quarter, indicating that, for example, even if your Q1 2021 gross invoices aren't at least 20% lower than your Q1 2019 gross invoices, 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 get approved for Q1 2021 based upon Q1 2021's gross invoices, you will likewise certify for Q2 2021 because you qualified in the lookback quarter of Q1 2021.
Very same thing for Q2 to Q3 and Q3 to Q4, so generally if you just receive Q1 and Q3 2021, you likewise receive Q2 and Q4 based upon the lookback. Likewise, even if you didn't have an adequate decrease in income, you can certify for the employee retention credit if you were required to completely or partially suspend operations in your business during 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 dining establishment, and your governor signed an executive order specifying that you require to close down indoor dining. That is an example of a partial shutdown. Also, not only are more businesses eligible for the employee retention credit thanks to these new laws, making PPP recipients qualified for the employee retention credit though not on the very same salaries and making more services eligible through the 20% decline limit instead of the 50% decline threshold, however the 2021 credit is likewise more profitable than the 2020 credit.
This is since for 2020, the employee retention credit was equivalent to 50% of all qualified salaries for 2020, the employee retention credit amounted to 50% of all qualified earnings you paid workers in between March 12, 2020, and December 31, 2020, with a limit of $10,000 in salaries for that entire time duration. The optimum 2020 credit per employee was $5,000. Okay, however that's absolutely nothing compared to the 2021 credit since for 2021, the credit is equal to 70% of qualified wages per worker paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in earnings per employee ... for that entire period? No. Per quarter. So for 2021 the percentage is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in wages per employee per quarter, so we're discussing a maximum credit of $7,000 per staff member per quarter. If you're qualified all four 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 godsend to numerous entrepreneur right now. You see what I mean now, right, how the employee retention credit has gone from ugly duckling in 2020 to beautiful swan in 2021? And by the way, by the method, certified earnings consists of employer-paid medical insurance premiums.
If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you need to choose the best 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 simply enjoy 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 much easier to qualify for the employee retention credit in 2021. I didn't qualify for the 2020 employee retention credit first, because I got first round of PPP money and 2nd due to the fact that my company 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. Not just are more companies 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 services eligible through the 20% decline limit rather than the 50% decrease limit, however the 2021 credit is also more financially rewarding than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit because for 2021, the credit is equal to 70% of qualified wages per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in incomes per worker ... for that entire time period?
Just How to Start
The most effective way is to function with a no-risk, contingency-based cost savings business. That will negotiate on behalf of their clients to get the most effective costs possible for their existing clients. They will certainly investigate old invoices for errors obtaining for their customers reimbursements and also tax credits. They can raise the success and total evaluation of their clients organizations.
Solutions provided can include:
Devoted experts that will analyze very complex program guidelines and also will certainly be available to answer your concerns, including:
Exactly how does the PPP lending variable into the ERC?
What are the distinctions between the 2020 and 2021 programs as well as exactly how does it relate to your business?
What are gathering policies for bigger, multi-state employers, and also just how do I interpret numerous states executive orders?
Just how do part-time, Union, and tipped workers influence the amount of my reimbursements?
Complete analysis regarding your qualification
Extensive evaluation of your case
Advice on the claiming procedure and documents
Specific program experience that a regular certified public accountant or pay-roll processor might not be well-versed in
Fast and smooth end-to-end procedure, from eligibility to declaring and getting 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 Obtain Begun? Its Simple.
1. Whichever company you pick to work with will figure out whether your company qualifies and gets approvel for the ERC.
2. They will certainly assess your case as well as calculate the optimum quantity you can obtain.
3. Their group overviews you through the asserting process, from starting to finish, including proper documents.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program began on March 13th, 2020 and finishes on September 30, 2021, for qualified businesses.
You can make an application for reimbursements for 2020 and also 2021 after December 31st of this year, right into 2022 and 2023. And possibly past then as well.
Many companies have received refunds, and others, along with reimbursements, additionally qualified to continue receiving ERC in every pay-roll they process through December 31, 2021, at around 30% of their pay-roll cost.
Some services have actually gotten reimbursements from $100,000 to $6 million.
Do we still certify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, companies can now receive the ERC also if they already obtained a PPP funding. Note, though, that the ERC will just put on earnings not utilized for the PPP.
Do we still accredit if we did not sustain a 20% decline in gross billings .
A federal government authority required complete or partial shutdown of your company throughout 2020 or 2021. This includes your procedures being limited by commerce, failure to take a trip or constraints of group conferences.
- Gross receipt decrease standards is different for 2020 as well as 2021, however is measured versus the present quarter as compared to 2019 pre-COVID amounts:
- A government authority needed full or partial closure of your organization throughout 2020 or 2021. This includes your procedures being limited by business, inability to travel or restrictions of group meetings.
- Gross invoice decrease standards is various for 2020 and 2021, but is determined against the existing quarter as contrasted to 2019 pre-COVID amounts.
Do we still qualify if we stayed open throughout the pandemic?
Yes. To certify, your service has to satisfy either among the adhering to requirements:
- Experienced a decline in gross invoices by 20%, or
- Needed to alter service operations as a result of federal government orders
Lots of products are taken into consideration as adjustments in business operations, consisting of shifts in task duties as well as the acquisition of added protective tools.