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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 provided can include:
Devoted specialists that will interpret extremely complex program policies and also will certainly be readily available to answer your concerns, including:
What period does the program cover?
Brentwood NY Employee Retention Tax Credit
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 service owners you understand, this video might literally be worth tens of thousands of dollars for them. And if you are a company owner and after you enjoy this video you desire 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], inform me a little about your company and your ballpark year-over-year income, 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 reducing your needed work tax deposits or you can request an advance payment of the credit utilizing IRS Form 7200, Advance Payment of Employer Credits Due to COVID-19.
Because that's the stuff your CPA need to stress about, I am not going to get into the complexities of that type here or the Form 941 and all the payroll stuff. In this video I desire to tell you what you need to understand 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 circumstances, of your business's tax situation to produce more cash flow in your business and more wealth for yourself.
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About Employee Retention Tax Credit
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, before I get into this, I want to state that absolutely nothing in this video is to be taken as legal or tax recommendations, this video is for basic informational functions just, yes, I am a tax and a cpa expert, but I am not your CPA nor your tax professional unless you have engaged my firm. Another disclaimer here, for purposes of this video I am assuming that if you're seeing this you are a small organization owner, which for employee retention credit functions indicates one hundred or fewer workers for functions of the 2020 credit and 5 hundred or fewer employees for purposes of the 2021 credit, if you have a company with over five hundred staff members I imagine 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 regional tax specialist who is so neck-deep in tax returns right now due to the fact that the government extended the tax deadline to May 17 or volume is simply the nature of their service 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 rewarding for service owners in 2021 and why weren't we talking about it in 2020, it's been around given 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 due to the fact that of the PPP, the Paycheck Protection Program.
The stimulus bill passed in December, the Consolidated Appropriations Act, as well as the American Rescue Plan Act, passed in February 2021, made changes to the ERC making it much more attractive. So generally the employee retention credit had a glow-up in between 2020 and 2021, it went from the unpopular woman with thick glasses and neglected eyebrows and her hair up in 2020 to the belle of the ball for service owners in 2021. Why? Why is the employee retention credit more attractive 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 Tax Credit
First factor, the employee retention credit for both 2020 and 2021 is now readily available to PPP recipients, however obviously you can't double dip. You can't get PPP for the hundred thousand dollars you paid your employees and then turn around and declare the employee retention credit on those incomes. 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 federal government on those wages that the federal government paid for you. So that makes 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 require to choose the finest covered period that will get you complete PPP forgiveness but likewise maximize your employee retention credit.
Also, for PPP forgiveness, you wish to fill up that payroll container with as lots of expenses as possible that do not count for employee retention credit purposes. For example, you can't claim the employee retention credit on state joblessness insurance coverage contributions, but state joblessness insurance contributions count toward PPP forgiveness, see? So you 'd wish to dispose all your state unemployment insurance contributions on your PPP forgiveness application to leave as much ordinary earnings as possible to take the employee retention credit on.
Another thing to note is you can't subtract the incomes you declared the employee retention credit on, and that makes sense as well, why should the federal government offer you a reduction for these wages that they currently offered you a credit for? Alright, sorry for getting a little sidetracked there, I just 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 easier to certify for the employee retention credit in 2021.
In 2021, for a quarter to certify for the employee retention credit, you just require to reveal a 20% decline in gross receipts compared to the very same calendar quarter in 2019. So this implies far more services will qualify. My organization, for example, 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, since I got first round of PPP cash and 2nd because my company 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. For 2021, for any quarter, you can choose to use the lookback quarter, meaning that, for example, even if your Q1 2021 gross receipts aren't at least 20% lower than your Q1 2019 gross invoices, you can compare for purposes 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 certify for Q1 2021 based upon Q1 2021's gross invoices, you will likewise receive Q2 2021 given that you qualified 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 get approved for Q2 and Q4 based upon the lookback. Even if you didn't have a sufficient decrease in earnings, you can certify for the employee retention credit if you were required to totally or partly suspend operations in your service 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 during that period of partial or full shutdown.
Typical example, you own a restaurant, and your governor signed an executive order mentioning that you need to shut down indoor dining. That is an example of a partial shutdown. Not just are more businesses qualified for the employee retention credit thanks to these new laws, making PPP recipients eligible for the employee retention credit though not on the very same earnings and making more services eligible through the 20% decrease limit rather than the 50% decrease threshold, however the 2021 credit is also more profitable 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 earnings per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in salaries per staff member ... 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 wages per staff member per quarter, so we're talking about an optimum credit of $7,000 per employee per quarter. That's right, folks, the optimum 2021 employee retention credit is $28,000 per worker.
If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you require to select the best covered period that will get you full PPP forgiveness however also maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just love talking about this stuff, 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 certify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit initially, due to the fact that I got very first round of PPP cash and second since my service didn't suffer that large 50% decrease needed to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my service qualifies. Not only are more organizations eligible for the employee retention credit thanks to these brand-new laws, making PPP recipients eligible for the employee retention credit though not on the very same salaries and making more companies eligible through the 20% decrease limit rather than the 50% decrease limit, but the 2021 credit is also more lucrative than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit because for 2021, the credit is equivalent to 70% of certified incomes per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in salaries per employee ... for that entire time period?
How to Start
The very best means is to collaborate with a no-risk, contingency-based expense savings business. That will certainly work out in behalf of their customers to obtain the very best prices feasible for their existing customers. They will investigate old billings for errors obtaining for their clients refunds and also credits. They can raise the success and general valuation of their clients companies.
Services provided can include:
Devoted specialists that will interpret extremely complex program policies and also will certainly be readily available to answer your concerns, including:
How does the PPP finance aspect right into the ERC?
What are the differences in between the 2020 and also 2021 programs and just how does it use to your service?
What are aggregation guidelines for larger, multi-state employers, as well as how do I interpret numerous states executive orders?
Just how do part-time, Union, and also tipped workers impact the quantity of my refunds?
Complete analysis concerning your qualification
Thorough evaluation of your situation
Support on the declaring procedure and documents
Particular program proficiency that a regular CPA or pay-roll processor might not be well-versed in
Quick and smooth end-to-end process, from eligibility to claiming and receiving 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 Begin? Its Simple.
1. Whichever company you select to work with will certainly determine whether your service certifies for the ERC.
2. They will examine your request and compute the optimum amount you can obtain.
3. Their team overviews you with the declaring process, from beginning to finish, including proper documentation.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program began on March 13th, 2020 and also finishes on September 30, 2021, for qualified companies.
You can obtain reimbursements for 2020 and 2021 after December 31st of this year, right into 2022 as well as 2023. And also potentially beyond after that as well.
Many companies have received refunds, and others, along with reimbursements, likewise qualified to proceed obtaining ERC in every pay-roll they refine to December 31, 2021, at close to 30% of their payroll expense.
Some businesses have received 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 receive the ERC also if they currently received a PPP financing. Keep in mind, however, that the ERC will only use to incomes not utilized for the PPP.
maintain a 20% decrease in gross invoices .
A government authority called for full or partial closure of your company during 2020 or 2021. This includes your procedures being limited by business, lack of ability to take a trip or limitations of team conferences.
- Gross receipt decrease standards is different for 2020 and 2021, but is determined against the existing quarter as contrasted to 2019 pre-COVID amounts:
- A government authority needed full or partial shutdown of your service during 2020 or 2021. This includes your procedures being restricted by business, inability to travel or constraints of team meetings.
- Gross invoice decrease requirements is various for 2020 and also 2021, yet is measured versus the current quarter as contrasted to 2019 pre-COVID amounts.
Do we still qualify if we remained open throughout the pandemic?
Yes. To qualify, your service needs to satisfy either among the following criteria:
- Experienced a decline in gross invoices by 20%, or
- Had to change business procedures as a result of federal government orders
Many products are taken into consideration as adjustments in service procedures, including shifts in task roles as well as the purchase of additional safety equipment.