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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 interpret extremely intricate program guidelines and also will be available to address your inquiries, including:
What duration does the program cover?
Bayside NY Employee Retention Credit Under The Cares Act
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 service, be sure to share this video with organization owners you understand, this video could actually be worth 10s of thousands of dollars for them. And if you are a company owner and after you enjoy 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], tell me a little about your organization and your ballpark year-over-year profits, and let's see if we can get some more cash back in your pocket because you can take this credit versus your payroll taxes you pay by minimizing your needed employment tax deposits or you can request 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 type here or the Form 941 and all the payroll things because that's the stuff your CPA ought to fret about. In this video I desire to inform you what you require to know so you can go to your CPA and state, "Hey, what about this employee retention credit, why have not you informed me about this?" so you can be informed and take ownership of your own tax situations, of your organization's tax circumstance to generate more money flow in your business and more wealth on your own.
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About Employee Retention Credit Under The Cares Act
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, prior to I enter this, I wish to state that absolutely nothing in this video is to be taken as legal or tax guidance, this video is for general educational functions just, yes, I am a tax and a cpa professional, but I am not your CPA nor your tax expert unless you have engaged my firm as such. Another disclaimer here, for functions of this video I am assuming that if you're watching this you are a little service owner, which for employee retention credit purposes suggests one hundred or fewer employees for functions of the 2020 credit and five hundred or fewer workers for functions of the 2021 credit, if you have a company with over five hundred staff members 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 deal with a local tax specialist who is so neck-deep in tax returns right now since the federal government extended the tax deadline to May 17 or volume is simply the nature of their organization that your tax specialist hasn't had the time to go into the weeds here like I have.
Employee retention credit, why is it so profitable for service owners in 2021 and why weren't we talking about it in 2020, it's been around considering that then, because the CARES Act? Yes, the employee retention credit has actually been around considering that 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.
But the stimulus bill passed in December, the Consolidated Appropriations Act, along with the American Rescue Plan Act, passed in February 2021, made changes to the ERC making it much more appealing. So essentially the employee retention credit had a glow-up 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 organization owners in 2021. Why? Why is the employee retention credit more appealing now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act? I'll tell you why, a couple of reasons.
Why Employee Retention Credit Under The Cares Act
Reason, the employee retention credit for both 2020 and 2021 is now offered 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 claim the employee retention credit on those wages. If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you require to pick the best covered period that will get you full PPP forgiveness but likewise maximize your employee retention credit.
Also, for PPP forgiveness, you desire to fill up that payroll pail with as numerous expenses as possible that do not count for employee retention credit functions. For example, you can't declare the employee retention credit on state unemployment insurance contributions, however state unemployment insurance contributions count toward PPP forgiveness, see? You 'd want to dump all your state joblessness insurance contributions on your PPP forgiveness application to leave as much ordinary wages as possible to take the employee retention credit on.
Another thing to note is you can't deduct the salaries you declared the employee retention credit on, and that makes sense as well, why should the government offer you a deduction for these salaries that they currently gave you a credit for? Alright, sorry for getting a little sidetracked there, I simply love talking about this things, however 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 simpler to qualify for the employee retention credit in 2021.
In 2021, for a quarter to qualify for the employee retention credit, you only require to show a 20% decrease in gross receipts compared to the exact same calendar quarter in 2019. So this implies even more organizations will qualify. My service, for example, experienced a 26% decline in gross receipts, comparing Q1 2019 to Q1 2021, and it was a comparable story last year too.
So I didn't receive the 2020 employee retention credit initially, due to the fact that I got very first round of PPP money and second since 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 company qualifies. For 2021, for any quarter, you can choose to utilize the lookback quarter, suggesting 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. Implication here is that if you get approved for Q1 2021 based upon Q1 2021's gross invoices, you will likewise get approved for Q2 2021 given that 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 receive Q2 and Q4 based upon the lookback. Likewise, even if you didn't have a sufficient decline in revenue, you can qualify for the employee retention credit if you were needed to totally or partly suspend operations in your company 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 throughout that period of partial or full shutdown.
Typical example, you own a dining establishment, and your governor signed an executive order specifying that you require to shut down indoor dining. That is an example of a partial shutdown. Not only are more organizations qualified for the employee retention credit thanks to these new laws, making PPP recipients qualified for the employee retention credit though not on the exact same incomes and making more businesses eligible through the 20% decrease limit rather than the 50% decline limit, but the 2021 credit is also more lucrative than the 2020 credit.
This is due to the fact that for 2020, the employee retention credit was equal to 50% of all qualified incomes for 2020, the employee retention credit was equivalent to 50% of all certified earnings you paid employees in between March 12, 2020, and December 31, 2020, with a limit of $10,000 in incomes for that entire time duration. The maximum 2020 credit per employee was $5,000. Okay, however that's nothing compared to the 2021 credit due to the fact that for 2021, the credit is equal to 70% of qualified wages per worker paid from January 1, 2021 through December 31, 2021, limited to $10,000 in incomes per staff member ... for that whole time duration? No. Per quarter. So for 2021 the portion is more (70% in 2021 vs. 50% in 2020) and you can take it on approximately $10,000 in earnings per staff member per quarter, so we're speaking about a maximum credit of $7,000 per worker per quarter. $7,000 times 4 is $28,000 if you're qualified all 4 quarters. That's right, folks, the optimum 2021 employee retention credit is $28,000 per employee. That's huge. That's a godsend to lots of company owner right now. So you see what I mean now, right, how the employee retention credit has gone from awful duckling in 2020 to beautiful swan in 2021, right? And by the method, by the method, qualified wages 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 pick the finest covered duration that will get you full PPP forgiveness but likewise maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just love talking about this things, but 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 simpler to certify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit initially, since I got very first round of PPP money and second because my service didn't suffer that big 50% decline required to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my service qualifies. Not only are more businesses qualified for the employee retention credit thanks to these new laws, making PPP receivers qualified for the employee retention credit though not on the same wages and making more organizations eligible through the 20% decline limit rather than the 50% decline limit, however the 2021 credit is also more profitable 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 qualified wages per employee paid from January 1, 2021 through December 31, 2021, limited to $10,000 in earnings per worker ... for that entire time period?
Just How to Start
The very best means is to deal with a no-risk, contingency-based price financial savings company. That will certainly bargain on part of their clients to get the ideal costs possible for their existing clients. They will certainly examine old billings for errors obtaining for their customers reimbursements and also tax credits. They can increase the productivity and also overall valuation of their customers companies.
Assistance provided can include:
Dedicated professionals that will interpret extremely intricate program guidelines and also will be available to address your inquiries, including:
Just how does the PPP lending variable into the ERC?
What are the differences between the 2020 and 2021 programs and also just how does it put on your business?
What are aggregation guidelines for bigger, multi-state employers, and also just how do I interpret numerous states executive orders?
Just how do part-time, Union, and also tipped staff members influence the quantity of my refunds?
Comprehensive analysis concerning your eligibility
Detailed evaluation of your claim
Guidance on the declaring process and documentation
Certain program experience that a regular certified public accountant or pay-roll processor could not be well-versed in
Rapid as well as smooth end-to-end procedure, from qualification to asserting and also getting refunds
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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/ |
Ready To Start? Its Simple.
1. Whichever business you choose to work with will figure out whether your organization qualifies for the ERC.
2. They will analyze your case and compute the maximum quantity you can obtain.
3. Their group overviews you via the asserting process, from beginning to end, including correct paperwork.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program began on March 13th, 2020 as well as 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 also 2023. And also possibly past then as well.
Many companies have received refunds, and also others, along with reimbursements, likewise qualified to proceed getting ERC in every pay-roll they refine through December 31, 2021, at around 30% of their pay-roll expense.
Some businesses have gotten refunds from $100,000 to $6 million.
Do we still certify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, services can currently receive the ERC also if they currently obtained a PPP financing. Note, however, that the ERC will just relate to wages not utilized for the PPP.
Do we still certify if we did not sustain a 20% decline in gross invoices .
A government authority required full or partial closure of your organization during 2020 or 2021. This includes your operations being limited by commerce, lack of ability to travel or restrictions of group meetings.
- Gross invoice decrease requirements is different for 2020 as well as 2021, but is gauged against the current quarter as compared to 2019 pre-COVID amounts:
- A federal government authority needed full or partial closure of your service during 2020 or 2021. This includes your operations being restricted by business, inability to take a trip or restrictions of team meetings.
- Gross receipt reduction standards is various for 2020 and 2021, however is measured versus the existing quarter as compared to 2019 pre-COVID quantities.
Do we still certify if we continued to be open throughout the pandemic?
Yes. To qualify, your company needs to meet either among the following criteria:
- Experienced a decline in gross receipts by 20%, or
- Had to transform company procedures as a result of government orders
Several items are taken into consideration as modifications in organization procedures, including changes in task functions and the purchase of extra protective tools.