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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.
Services supplied can include:
Dedicated experts that will certainly analyze very intricate program guidelines as well as will certainly be offered to answer your questions, including:
What period does the program cover?
Brentwood NY Employee Retention Erc
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 Functions
Even if you do not own an organization, be sure to share this video with organization owners you know, this video could actually be worth tens of thousands of dollars for them. And if you are a company 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 company 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 versus 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.
I am not going to get into the complexities of that kind here or the Form 941 and all the payroll stuff because that's the stuff your CPA ought to worry about. In this video I desire to inform you what you require to understand so you can go to your CPA and say, "Hey, what about this employee retention credit, why haven't you informed me about this?" so you can be informed and take ownership of your own tax scenarios, of your organization's tax situation to generate more capital in your organization and more wealth for yourself.
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About Employee Retention Erc
Alright, now let's dig into this and let's discuss the employee retention credit or the ERC as some folks like to call it, prior to I get into this, I wish to state that absolutely 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 tax and a certified public accountant professional, however I am not your CPA nor your tax professional unless you have engaged my firm as such. Another disclaimer here, for purposes of this video I am assuming that if you're seeing this you are a small company owner, which for employee retention credit purposes means one hundred or less staff members for purposes of the 2020 credit and 5 hundred or fewer employees for purposes of the 2021 credit, if you have a business with over 5 hundred employees I envision you have in-house counsel, in-house CPAs who are on top of this stuff, but I'm here for you small company owners who might 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 just the nature of their business that your tax professional hasn't had the time to dig into the weeds here like I have.
So employee retention credit, why is it so rewarding for service owners in 2021 and why weren't we speaking about it in 2020, it's been around considering that then, because the CARES Act? Why is it getting all this buzz now that it wasn't in 2015? Well, let's back it up. Yes, the employee retention credit has 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 because of the PPP, the Paycheck Protection Program. Initially, in 2020, if you got a PPP loan as an employer, you were not eligible for the employee retention credit.
Generally the employee retention credit had a glow-up between 2020 and 2021, it went from the unpopular woman with neglected eyebrows and thick glasses 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 Erc
Factor, 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 workers and then turn around and claim the employee retention credit on those wages as well. The government does not look too fondly on paying your payroll for you through the PPP and after that you declaring a credit versus the taxes you pay the federal government on those salaries that the government paid for you. That makes sense. Now, there's some preparation here. 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 finest covered duration that will get you complete PPP forgiveness however also optimize your employee retention credit.
For PPP forgiveness, you want to fill up that payroll container with as lots of expenses as possible that do not count for employee retention credit purposes. You can't declare the employee retention credit on state unemployment insurance contributions, but state joblessness insurance coverage 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 regular wages as possible to take the employee retention credit on.
This can get extremely technical extremely fast and it's extremely circumstance specific in terms of optimizing PPP vs. ERC and my firm has tools to figure this stuff out for you, I'm not going to dig into all that here, however simply know that you truly 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 earnings you claimed the employee retention credit on, which makes good sense also, why should the federal government provide you a deduction for these incomes that they currently offered you a credit for? Essentially the credit is tax-effected. Alright, sorry for getting a little sidetracked there, I simply love discussing this things, however let's discuss another factor why the employee retention credit is more appealing now than it was in 2015, and that is that it's simpler to qualify for the employee retention credit in 2021. In 2020, for a quarter to receive the employee retention credit, you had to show a 50% decline in gross invoices compared to the exact same calendar quarter in 2019.
However 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 very same calendar quarter in 2019. This suggests far more organizations will qualify. My business, for instance, experienced a 26% decrease in gross receipts, comparing Q1 2019 to Q1 2021, and it was a similar story in 2015 too.
I didn't qualify for the 2020 employee retention credit first, because I got first round of PPP cash and 2nd due to the fact that my service 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 qualifies. Likewise, for 2021, for any quarter, you can choose to use the lookback quarter, suggesting that, for example, even if your Q1 2021 gross receipts aren't a minimum of 20% lower than your Q1 2019 gross receipts, 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 certify for Q1 2021 based upon Q1 2021's gross invoices, you will also certify for Q2 2021 because you certified in the lookback quarter of Q1 2021.
Exact same thing for Q2 to Q3 and Q3 to Q4, so generally if you just qualify for Q1 and Q3 2021, you also certify for Q2 and Q4 based on the lookback. Likewise, even if you didn't have an adequate decrease in profits, you can get approved for the employee retention credit if you were required to completely or partly suspend operations in your service during any calendar quarter in 2020 or 2021 due to state or federal orders, in which case you are qualified for the employee retention credit throughout that duration of partial or full shutdown.
Typical example, you own a dining establishment, and your governor signed an executive order mentioning that you require to shut down indoor dining. That is an example of a partial shutdown. Not only are more businesses eligible for the employee retention credit thanks to these new laws, making PPP receivers eligible for the employee retention credit though not on the exact same incomes and making more organizations eligible through the 20% decline limit rather than the 50% decrease limit, however the 2021 credit is also more profitable than the 2020 credit.
Not bad, but that's absolutely nothing compared to the 2021 credit because for 2021, the credit is equivalent to 70% of certified earnings per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in wages per worker ... for that entire time duration? For 2021 the portion 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 talking about an optimum credit of $7,000 per worker per quarter. That's right, folks, the optimum 2021 employee retention credit is $28,000 per staff member.
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 best covered duration that will get you complete PPP forgiveness however likewise optimize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I simply 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 certify for the 2020 employee retention credit first, since I got first round of PPP money and second because my service didn't suffer that large 50% decline required to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my business certifies. Not only are more services 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 very same earnings and making more services eligible through the 20% decline limit rather than the 50% decline limit, but the 2021 credit is likewise more profitable than the 2020 credit.
Not bad, however that's nothing compared to the 2021 credit since for 2021, the credit is equivalent to 70% of certified earnings per worker paid from January 1, 2021 through December 31, 2021, limited to $10,000 in earnings per employee ... for that entire time period?
Just How to Get going
The best means is to collaborate with a no-risk, contingency-based expense financial savings company. That will bargain in behalf of their clients to get the ideal prices possible for their existing clients. They will investigate old invoices for errors obtaining for their clients refunds and tax credits. They can increase the productivity and total evaluation of their customers organizations.
Services supplied can include:
Dedicated experts that will certainly analyze very intricate program guidelines as well as will certainly be offered to answer your questions, including:
Exactly how does the PPP financing variable right into the ERC?
What are the differences in between the 2020 and 2021 programs and also just how does it put on your company?
What are gathering regulations for bigger, multi-state employers, as well as just how do I analyze numerous states executive orders?
Exactly how do part-time, Union, and also tipped staff members influence the amount of my reimbursements?
Complete assessment regarding your eligibility
Extensive evaluation of your case
Assistance on the asserting process and also paperwork
Details program know-how that a routine certified public accountant or pay-roll cpu could not be well-versed in
Smooth and also rapid end-to-end procedure, from eligibility to declaring as well as receiving 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/ |
All Set To Get Going? Its Simple.
1. Whichever company you choose to work with will determine whether your company certifies and gets approvel for the ERC.
2. They will assess your claim and compute the maximum quantity you can receive.
3. Their group overviews you with the claiming process, from starting to end, including correct documentation.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program started on March 13th, 2020 and also ends on September 30, 2021, for qualified employers.
You can get reimbursements for 2020 as well as 2021 after December 31st of this year, right into 2022 and also 2023. And also possibly beyond then as well.
Many businesses have received refunds, and others, in addition to reimbursements, also certified to continue getting ERC in every payroll they refine through December 31, 2021, at about 30% of their pay-roll cost.
Some organizations have gotten reimbursements from $100,000 to $6 million.
Do we still certify if we currently took the PPP?
Yes. Under the Consolidated Appropriations Act, services can currently get approved for the ERC even if they already received a PPP loan. Note, however, that the ERC will only put on incomes not made use of for the PPP.
sustain a 20% decline in gross invoices .
A government authority called for partial or complete shutdown of your organization during 2020 or 2021. This includes your procedures being restricted by business, lack of ability to take a trip or restrictions of team meetings.
- Gross invoice reduction requirements is various for 2020 and 2021, however is gauged versus the current quarter as compared to 2019 pre-COVID quantities:
- A government authority required partial or full closure of your business during 2020 or 2021. This includes your procedures being restricted by business, failure to travel or constraints of team meetings.
- Gross receipt decrease criteria is different for 2020 and also 2021, but is gauged versus the present quarter as compared to 2019 pre-COVID quantities.
Do we still qualify if we stayed open throughout the pandemic?
Yes. To certify, your company has to fulfill either one of the following standards:
- Experienced a decrease in gross invoices by 20%, or
- Needed to transform organization operations as a result of federal government orders
Several products are taken into consideration as adjustments in company operations, consisting of changes in task functions as well as the acquisition of extra safety equipment.