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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:
Devoted professionals that will interpret highly intricate program regulations as well as will certainly be offered to answer your inquiries, including:
What period does the program cover?
Clarkstown 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 Functions
Even if you don't own a business, be sure to share this video with company owners you understand, this video might actually be worth tens of thousands of dollars for them. And if you are a business 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 e-mail, [email protected], tell me a little about your business and your ballpark year-over-year revenue, and let's see if we can get some more cash back in your pocket because you can take this credit against your payroll taxes you pay by minimizing your needed 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 intricacies of that type here or the Form 941 and all the payroll stuff because that's the things your CPA must fret about. In this video I wish to tell you what you need 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?" You can be notified and take ownership of your own tax scenarios, of your company's tax situation to produce more cash flow in your organization and more wealth for yourself.
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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 get into this, I want to state that nothing in this video is to be taken as legal or tax suggestions, this video is for basic educational purposes only, yes, I am a tax and a certified public accountant expert, however I am not your CPA nor your tax expert unless you have engaged my company. Another disclaimer here, for functions of this video I am assuming that if you're seeing this you are a little service owner, which for employee retention credit functions suggests one hundred or fewer staff members for functions of the 2020 credit and five hundred or less workers for functions of the 2021 credit, if you have a company with over 5 hundred workers I imagine you have in-house counsel, in-house CPAs who are on top of this stuff, however I'm here for you small company owners who may work with a regional tax professional who is so neck-deep in income tax return right now since the federal government extended the tax deadline to May 17 or volume is just the nature of their organization 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 organization owners in 2021 and why weren't we talking about it in 2020, it's been around because then, because the CARES Act? 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 due to the fact that of the PPP, the Paycheck Protection Program.
But the stimulus expense passed in December, the Consolidated Appropriations Act, as well as the American Rescue Plan Act, passed in February 2021, made modifications to the ERC making it far more appealing. So generally the employee retention credit had a glow-up 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 organization 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 inform you why, a few 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, however 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 salaries. If you got PPP and you are qualified for the employee retention credit, then when you do your PPP forgiveness application, you require to choose the finest covered duration that will get you complete PPP forgiveness but also optimize your employee retention credit.
For PPP forgiveness, you want to fill up that payroll pail with as many costs as possible that do not count for employee retention credit purposes. You can't declare 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 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.
Another thing to note is you can't deduct the salaries you claimed the employee retention credit on, and that makes sense as well, why should the federal government provide you a deduction for these salaries that they currently provided you a credit for? Alright, sorry for getting a little sidetracked there, I simply like 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.
In 2021, for a quarter to certify for the employee retention credit, you just need to show a 20% decrease in gross receipts compared to the exact same calendar quarter in 2019. So this implies far more services will certify. My organization, for example, experienced a 26% decline in gross receipts, 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 first, because I got very first round of PPP money and second since my organization didn't suffer that large 50% decrease required to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my business certifies. 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 functions 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 on Q1 2021's gross invoices, you will also certify for Q2 2021 since you qualified in the lookback quarter of Q1 2021.
Exact same thing for Q2 to Q3 and Q3 to Q4, so essentially if you simply certify for Q1 and Q3 2021, you also receive Q2 and Q4 based upon the lookback. Likewise, even if you didn't have an adequate decrease in profits, you can receive the employee retention credit if you were required to fully or partly suspend operations in your organization throughout 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 period of complete or partial shutdown.
Common example, you own a dining establishment, and your governor signed an executive order stating that you require to close 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 brand-new laws, making PPP receivers eligible for the employee retention credit though not on the very same incomes and making more businesses eligible through the 20% decline threshold rather than the 50% decline threshold, however the 2021 credit is also 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 qualified wages per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in incomes per staff member ... for that whole time period? For 2021 the percentage is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in earnings per employee per quarter, so we're talking about an optimum credit of $7,000 per worker per quarter. That's right, folks, the maximum 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 need to pick the finest covered duration that will get you complete PPP forgiveness but likewise maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just 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 simpler to qualify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit initially, since I got first round of PPP cash and 2nd due to the fact that my organization 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. Not just are more companies eligible 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 incomes and making more companies eligible through the 20% decrease threshold rather than the 50% decline limit, but the 2021 credit is also more financially rewarding than the 2020 credit.
Not bad, however that's absolutely nothing compared to the 2021 credit due to the fact that for 2021, the credit is equivalent to 70% of certified incomes per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in wages per employee ... for that whole time duration?
Exactly How to Start
The most effective method is to work with a no-risk, contingency-based price savings business. That will certainly discuss in behalf of their clients to obtain the most effective prices feasible for their existing clients. They will audit old billings for mistakes getting their clients refunds and credits. They can enhance the earnings and total valuation of their customers companies.
Services supplied can include:
Devoted professionals that will interpret highly intricate program regulations as well as will certainly be offered to answer your inquiries, including:
Exactly how does the PPP finance element into the ERC?
What are the differences in between the 2020 and 2021 programs and also how does it use to your business?
What are gathering regulations for larger, multi-state companies, and also how do I translate numerous states executive orders?
Exactly how do part-time, Union, as well as tipped staff members affect the quantity of my reimbursements?
Thorough evaluation regarding your qualification
Thorough evaluation of your claim
Guidance on the asserting procedure and paperwork
Specific program proficiency that a regular certified public accountant or payroll cpu may not be well-versed in
Smooth and rapid end-to-end procedure, from eligibility to claiming and obtaining 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 Begin? Its Simple.
1. Whichever company you choose to work with will determine whether your service certifies for the ERC.
2. They will examine your case as well as calculate the optimum amount you can get.
3. Their group guides you with the asserting procedure, from starting to finish, including correct paperwork.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program started on March 13th, 2020 and ends on September 30, 2021, for eligible companies.
You can make an application for refunds for 2020 as well as 2021 after December 31st of this year, right into 2022 and 2023. And potentially past after that too.
Many businesses have received refunds, as well as others, along with reimbursements, likewise certified to continue obtaining ERC in every pay-roll they refine through December 31, 2021, at close to 30% of their payroll expense.
Some businesses have gotten refunds from $100,000 to $6 million.
Do we still qualify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, companies can currently get the ERC even if they currently got a PPP loan. Keep in mind, however, that the ERC will only use to wages not used for the PPP.
Do we still accredit if we did not) sustain a 20% decline in gross invoices .
A government authority called for partial or full closure of your business throughout 2020 or 2021. This includes your operations being restricted by commerce, failure to take a trip or constraints of team conferences.
- Gross receipt reduction standards is different for 2020 as well as 2021, however is determined against the existing quarter as compared to 2019 pre-COVID amounts:
- A federal government authority required complete or partial closure of your organization during 2020 or 2021. This includes your procedures being restricted by business, lack of ability to take a trip or limitations of team meetings.
- Gross receipt reduction requirements is various for 2020 and also 2021, yet is measured versus the current quarter as compared to 2019 pre-COVID quantities.
Do we still certify if we continued to be open during the pandemic?
Yes. To qualify, your company needs to satisfy either one of the following requirements:
- Experienced a decrease in gross receipts by 20%, or
- Needed to change company operations as a result of government orders
Lots of items are taken into consideration as adjustments in organization procedures, consisting of shifts in task functions and the acquisition of extra protective devices.