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What duration does the program cover?
Bayside NY Employee Retention Strategies
Established by the CARES Act, the ERC is a refundable tax credit – a grant, not a loan – that a business can claim. The Employee Retention Strategies is offered to both little and mid-sized companies and is based upon certified salaries and health care paid to workers. Qualifying organizations can benefit from the following offerings:
As much as$ 26,000 per employee
Offered for 2020 and the very first 3 quarters of 2021
Can qualify with reduced earnings or COVID event
No limit on funding.EMPLOYEE RETENTION STRATEGIES is a refundable tax creditThe ERC has gone through several changes and has many technical information, consisting of how to determine competent incomes, which workers are qualified and more. Many Companies are availablt tohelps understand everything through dedicated professionals that guide and lay out the actions that need to be taken so entrepreneur can optimize their claim. “The employee retention strategies is a exceptionally under-utilized and very important financial assistance opportunity for small company owners to get from the federal government, discusses Business Warrior CEO Rhett Doolittle. After identifying this opportunity to help more small companies, establishing a partnership with Bottom Line Savings was a no-brainer. Since 2008, theyve recuperated over $2.2 billion dollars for more than 7,000 customers including American Express, Uber, and Rolex.To certify as an employer, company owners must satisfy the following:Experience modifications to your operations due to an Executive Order during 2020 or 2021; orYour gross invoices for 2020 fell below 50% for the same quarter in 2019 and fell below 80% for 2021.
Established by the CARES Act, the ERC is a refundable tax credit – a grant, not a loan – that a business can claim. The Employee Retention Strategies is offered to both little and mid-sized companies and is based upon certified salaries and health care paid to workers. Qualifying organizations can benefit from the following offerings:
As much as$ 26,000 per employee
Offered for 2020 and the very first 3 quarters of 2021
Can qualify with reduced earnings or COVID event
No limit on funding.EMPLOYEE RETENTION STRATEGIES is a refundable tax creditThe ERC has gone through several changes and has many technical information, consisting of how to determine competent incomes, which workers are qualified and more. Many Companies are availablt tohelps understand everything through dedicated professionals that guide and lay out the actions that need to be taken so entrepreneur can optimize their claim. “The employee retention strategies is a exceptionally under-utilized and very important financial assistance opportunity for small company owners to get from the federal government, discusses Business Warrior CEO Rhett Doolittle. After identifying this opportunity to help more small companies, establishing a partnership with Bottom Line Savings was a no-brainer. Since 2008, theyve recuperated over $2.2 billion dollars for more than 7,000 customers including American Express, Uber, and Rolex.To certify as an employer, company owners must satisfy the following:Experience modifications to your operations due to an Executive Order during 2020 or 2021; orYour gross invoices for 2020 fell below 50% for the same quarter in 2019 and fell below 80% for 2021.
Exactly how It Functions
Employee Retention Strategies Eligible employers should fall under one of 2 categories to receive the credit: 1. Company has a substantial decline in gross receipts. 2020: eligible when gross receipts are down 50% versus the very same quarter in 2019 continue to certify up until the quarter AFTER receipts are more than 80% versus the same quarter in 2019 2021: eligible if gross invoices are down 20% or more versus very same quarter in 2019 2. Employers organization is totally or partly suspended by federal government order due to COVID-19 during the calendar quarter. You will just be eligible for the period of time company was totally or partially suspended Aggregation guidelines use when making these determinations.
Company A certifies for the credit in Q3, but will NOT certify in Q4 unless they once again experience a 50% drop in receipts vs Q4 of 2019. If instead Employer As invoices were down 25% in Q3 of 2020 vs Q3 of 2019, Employer A would qualify for the credit in Q3 and in Q4, regardless of Q4 gross receipts.
2021 SIGNIFICANT DECLINE 2021 Significant Decline Details 1. Can choose to base your eligibility on the previous quarters decrease in gross receipts i.e. I can determine my eligibility in Q1 of 2021 based upon Q4 of 2020 vs Q4 of 2019 NOTE: at this time it does NOT appear that you are needed to use this technique in all future quarters once the election is made 2. The same quarter in 2020 is substituted if an employer did not exist in the start of the very same quarter in 2019.
FULL OR PARTIAL GOVERNMENT SHUTDOWN Shutdown due to Federal, State or Local Government order that restricts commerce, group, or travel meetings due to COVID-19 and that order impacts operations, hours, etc. Examples: order to shutdown non-essential organizations, federal government imposed curfews, regional health department mandate to close for cleaning/disinfecting Not qualified if employer voluntarily suspends operation or minimizes hours.
Does the company have appropriate teleworking capabilities? Did you reduce your open hours in order to do a deep clean to comply? Did you require that business be carried out only by visit (formerly had walk-in capability) 9.
NOMINAL EFFECT SAFE HARBOR 10% or more decline in the ability to supply items and services in the typical course of the companies organization thought about partly shut down by a government order. Exceptions: 1. if your organization just reduced because customers were not out. Must have some sort of aspect straight associated to a government order. 2. Requiring somebody to wear a mask or gloves will not have a small result.
2020: eligible when gross receipts are down 50% versus the very same quarter in 2019 continue to certify till the quarter AFTER invoices are more than 80% versus the very same quarter in 2019 2021: eligible if gross receipts are down 20% or more versus very same quarter in 2019 2. Employers company is totally or partially suspended by federal government order due to COVID-19 during the calendar quarter. If instead Employer As invoices were down 25% in Q3 of 2020 vs Q3 of 2019, Employer A would qualify for the credit in Q3 and in Q4, regardless of Q4 gross invoices.
Can choose to base your eligibility on the previous quarters decline in gross receipts i.e. I can determine my eligibility in Q1 of 2021 based on Q4 of 2020 vs Q4 of 2019 NOTE: at this time it does NOT appear that you are required to use this approach in all future quarters once the election is made 2. If an employer did not exist in the beginning of the exact same quarter in 2019, the very same quarter in 2020 is substituted.2020: eligible as soon as gross receipts are down 50% versus the exact same quarter in 2019 continue to certify up until the quarter AFTER receipts are more than 80% versus the very same quarter in 2019 2021: eligible if gross invoices are down 20% or more versus same quarter in 2019 2. Employers business is fully or partly suspended by federal government order due to COVID-19 throughout the calendar quarter.
2020 SIGNIFICANT DECLINE 2020 Significant Decline Example Employer As invoices were down 55% in Q2 of 2020 vs Q2 of 2019. Company A certifies for the credit in Q2. Employer As invoices were only down 15% in Q3 of 2020 vs Q3 of 2019. Employer A gets approved for the credit in Q3, however will NOT qualify in Q4 unless they again experience a 50% drop in invoices vs Q4 of 2019. If instead Employer As invoices were down 25% in Q3 of 2020 vs Q3 of 2019, Employer A would receive the credit in Q3 and in Q4, no matter Q4 gross invoices.
2021 SIGNIFICANT DECLINE 2021 Significant Decline Details 1. Can elect to base your eligibility on the previous quarters decrease in gross invoices i.e. I can determine my eligibility in Q1 of 2021 based on Q4 of 2020 vs Q4 of 2019 NOTE: at this time it does NOT appear that you are required to utilize this approach in all future quarters once the election is made 2. If a company did not exist in the start of the same quarter in 2019, the very same quarter in 2020 is substituted.
COMPLETE OR PARTIAL GOVERNMENT SHUTDOWN Shutdown due to Federal, State or Local Government order that restricts commerce, group, or travel conferences due to COVID-19 and that order effects operations, hours, etc. Examples: order to shutdown non-essential businesses, government imposed curfews, regional health department mandate to close for cleaning/disinfecting Not eligible if employer willingly suspends operation or reduces hours.
Does the employer have adequate teleworking capabilities? Did you decrease your open hours in order to do a deep clean to comply? Did you require that business be carried out only by visit (formerly had walk-in capability) 9.
SMALL EFFECT SAFE HARBOR 10% or more decrease in the ability to provide items and services in the typical course of the companies business considered partly shut down by a government order. Exceptions: 1. Must have some sort of element directly associated to a government order.
2020: eligible as soon as gross receipts are down 50% versus the exact same quarter in 2019 continue to certify until the quarter AFTER receipts are more than 80% versus the same quarter in 2019 2021: eligible if gross invoices are down 20% or more versus same quarter in 2019 2. Companies business is fully or partially suspended by government order due to COVID-19 during the calendar quarter. If rather Employer As receipts were down 25% in Q3 of 2020 vs Q3 of 2019, Employer A would qualify for the credit in Q3 and in Q4, regardless of Q4 gross receipts.
Can choose to base your eligibility on the previous quarters decline in gross invoices i.e. I can identify my eligibility in Q1 of 2021 based on Q4 of 2020 vs Q4 of 2019 NOTE: at this time it does NOT appear that you are required to use this approach in all future quarters once the election is made 2. If a company did not exist in the start of the exact same quarter in 2019, the same quarter in 2020 is replaced.
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About The Employee Retention Strategies
Several locations or aggregated groups under different Govt. orders - If some of the locations are partly shut down due to a government order AND the company has a policy that the other places (not shut down) will adhere to CDC or Homeland Security guidance, ALL locations will be considered partially shut down. Aggregated Group If a trade or company is run by multiple members of an aggregated group, and if the operations of one member of the aggregated group are suspended due to a governmental order, then all members of the aggregated group are considered to be partly suspended.
CREDIT CALCULATION 2020 credit is 50% of qualified salaries paid throughout qualified period Up to $10,000 certified wages per staff member for the year max credit of $5,000 per staff member in 2020 2021 credit is 70% of certified wages paid during competent period Up to $10,000 per staff member PER quarter in which you are eligible max credit of $7,000 per worker each eligible quarter in 2021.
QUALIFIED WAGES Gross salaries Employer contributions to medical insurance Doesn't include earnings used for PPP or any other credit (i.e. FFCRA) Doesn't consist of earnings paid to FORMER workers (i.e. severance) Doesn't consist of earnings paid to owners relative Owners and spouses themselves uncertain Qualified incomes restricted if thought about big employer.
SMALL VS LARGE EMPLOYERS If you are a SMALL employer, wages paid throughout qualified period get approved for credit regardless of whether the staff member has the ability to work 2020 Small Employer = 100 or fewer FULL TIME EMPLOYEES 2021 Small Employer = 500 or fewer FULL TIME EMPLOYEES If LARGE employer, only incomes paid to those who are NOT working qualify Aggregation rules use when making this determination.Full time workers Based on 2019 employees Employee averaging 30+ hours/week or 130+ hours/month is full-time NOT an FTE computation those under 30 hours/week not consisted of in count.
QUALIFIED WAGES LARGE EMPLOYERS 1. Partial Day of work/paid complete day - The quantity of wage attributable to the not working is a qualifying wage. Even if the employee is working a partial day, the portion that is associated to the not working will be considered a certifying wage. 2. Payment of holiday, sick, PTO, or severance is not a qualifying wage for LARGE companies only 3. Medical insurance paid while a staff member is out on furlough or just partly working is a qualifying wage. You designate the quantity of health insurance coverage to qualified and nonqualified wage if partially working.
Why Employee Retention Strategies?
PPP V. ERC 1. If have not applied for forgiveness, then do the applications together in order to maximize the benefits of both programs. Make sure that you optimize the nonpayroll costs up to the 40% number on the PPP application. If you have used currently, the payroll included in the PPP application is disallowed from the ERC to the degree that it is required to compute the forgiveness amount.
PPP V. ERC EXAMPLES ASSUME FULL FORGIVENESS Application used $130,000 of payroll and $70,000 of other expenditures. Application used $200,000 of payroll and $70,000 of other expenditures for a total of $270,000. Application utilized $200,000 of payroll expenses and $90,000 of other expenditures for a total of $290,000.
Application utilized $100,000 of payroll just (not health or retirement or other costs). Application used $130,000 of payroll and $70,000 of other expenses. Application used $200,000 of payroll and $70,000 of other expenditures for a total of $270,000. Application used $200,000 of payroll expenses and $90,000 of other costs for an overall of $290,000.
How to Start
HOW TO MAXIMIZE THE ERC WITH PPP 1. Owners loved ones cant get ERC Put all of their wages to PPP, subject to PPP limitations. 2. Set Up C or Partners with Self Employment (argument is still out on the owner/employees) cant get ERC Put all of their self employment to PPP, subject to PPP limits 3. Consider timing. If the closed down takes place in 2nd quarter, utilize all of the qualified 3rd and 4th quarter earnings towards the PPP and utilize the 2nd quarter incomes for the ERC. 4. Think about vacation/severance pay may not be eligible for ERC so put toward PPP.
INCOME TAX CONSEQUENCES Deductibility of wages: The quantity of the credit lowers the overall wage reduction, and therefore reduces earnings for other functions, such as the R&D credit, or 199A NYS allows a subtraction adjustment to deduct the earnings
No charge enforced if don't pay in required social security taxes to the level you qualify for ERC i.e. if Employer A owes $20,000 in social security taxes however knows they will certify for $12,000 in ERC credits in that quarter, they can choose to only pay in $8,000 and will not deal with penalties for underpayment will claim the $12,000 credit on that quarters Form 941 3. Type 7200 Advance Payment of Employer Credits i.e. if Employer A owes $20,000 in social security taxes however understands they will qualify for a $25,000 in ERC credits in that quarter, they can pick not to pay in the SS taxes and can submit a type 7200 to gather the remaining $5,000 in advance.
RESOURCES IRS FAQS HTTPS://WWW.IRS.GOV/NEWSROOM/FAQS-EMPLOYEE-RETENTIONCREDIT-UNDER-THE-CARES-ACT IRS NOTICE 2021-20 HTTPS://WWW.IRS.GOV/PUB/IRS-DROP/N-21-20.PDF IRS NOTICE 2021-23 HTTPS://WWW.IRS.GOV/PUB/IRS-DROP/N-21-23.PDF
| Finance Pro Plus WEBSITE: https://www.financeproplus.com/ |
Bottom Line Concepts WEBSITE: https://erc.bottomlinesavings.com/ |
Equifax Workforce Solutions WEBSITE: https://workforce.equifax.com/solutions/employee-retention-credit |
Valiant Capital WEBSITE: https://erc.valiant-capital.com/ |
| Disisaster Loan Advisors WEBSITE: https://www.disasterloanadvisors.com/ |
ERTC Filing WEBSITE: https://info.ertcfiling.com/employee-retention-tax-credit-new-york-11368/ |
Adams Brown Strategic Allies and CPAs WEBSITE: https://www.adamsbrowncpa.com/ertc-tax-credit-consulting-new-york/ |
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| NYC Business WEBSITE: https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program |
Omega Funding solutions WEBSITE: https://www.omegafundingsolutions.com/ |
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program began on March 13th, 2020 as well as finishes on September 30, 2021, for qualified organizations.
You can look for reimbursements for 2020 and 2021 after December 31st of this year, right into 2022 and also 2023. And possibly past after that also.
Many services have received refunds, as well as others, in enhancement to reimbursements, also certified to continue obtaining ERC in every pay-roll they refine through December 31, 2021, at around 30% of their payroll cost.
Some businesses have obtained reimbursements from $100,000 to $6 million.
Do we still qualify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, companies can now certify for the ERC even if they already obtained a PPP financing. Keep in mind, though, that the ERC will only use to earnings not made use of for the PPP.
maintain a 20% decline in gross receipts .
A federal government authority needed full or partial shutdown of your business throughout 2020 or 2021. This includes your procedures being limited by commerce, lack of ability to take a trip or restrictions of team meetings.
- Gross receipt decrease standards is different for 2020 as well as 2021, yet is gauged versus the present quarter as contrasted to 2019 pre-COVID amounts:
- A federal government authority needed partial or full shutdown of your business throughout 2020 or 2021. This includes your operations being restricted by commerce, inability to travel or constraints of team meetings.
- Gross invoice decrease standards is different for 2020 and 2021, yet is determined versus the current quarter as compared to 2019 pre-COVID amounts.
Do we still qualify if we continued to be open during the pandemic?
Yes. To qualify, your organization needs to meet either one of the following requirements:
- Experienced a decline in gross receipts by 20%, or
- Had to change business operations as a result of federal government orders
Many things are thought about as changes in business procedures, including changes in job duties as well as the acquisition of added safety equipment.