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What period does the program cover?
Clarkstown NY Employee Retention Grant Program
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 Grant Program is readily available to both mid-sized and little companies and is based on certified incomes and health care paid to staff members. Qualifying businesses can benefit from the following offerings:
Up to$ 26,000 per employee
Available for 2020 and the very first 3 quarters of 2021
Can qualify with reduced earnings or COVID occasion
No limit on funding.EMPLOYEE RETENTION GRANT PROGRAM is a refundable tax creditThe ERC has undergone several changes and has numerous technical information, consisting of how to figure out certified wages, which staff members are qualified and more. Numerous Companies are availablt tohelps understand all of it through devoted specialists that guide and outline the actions that require to be taken so business owners can optimize their claim. “The employee retention grant program is a incredibly valuable and extremely under-utilized financial assistance chance for small organization owners to get from the government, discusses Business Warrior CEO Rhett Doolittle. After recognizing this chance to assist more small companies, establishing a collaboration with Bottom Line Savings was a no-brainer. Considering that 2008, theyve recuperated over $2.2 billion dollars for more than 7,000 customers including American Express, Uber, and Rolex.To qualify as a company, company owner must meet the following:Experience modifications to your operations due to an Executive Order during 2020 or 2021; orYour gross receipts for 2020 fell below 50% for the same quarter in 2019 and fell listed below 80% for 2021.
Established by the CARES Act, the ERC is a refundable tax credit – a grant, not a loan – that a business can claim. The Employee Retention Grant Program is readily available to both mid-sized and little companies and is based on certified incomes and health care paid to staff members. Qualifying businesses can benefit from the following offerings:
Up to$ 26,000 per employee
Available for 2020 and the very first 3 quarters of 2021
Can qualify with reduced earnings or COVID occasion
No limit on funding.EMPLOYEE RETENTION GRANT PROGRAM is a refundable tax creditThe ERC has undergone several changes and has numerous technical information, consisting of how to figure out certified wages, which staff members are qualified and more. Numerous Companies are availablt tohelps understand all of it through devoted specialists that guide and outline the actions that require to be taken so business owners can optimize their claim. “The employee retention grant program is a incredibly valuable and extremely under-utilized financial assistance chance for small organization owners to get from the government, discusses Business Warrior CEO Rhett Doolittle. After recognizing this chance to assist more small companies, establishing a collaboration with Bottom Line Savings was a no-brainer. Considering that 2008, theyve recuperated over $2.2 billion dollars for more than 7,000 customers including American Express, Uber, and Rolex.To qualify as a company, company owner must meet the following:Experience modifications to your operations due to an Executive Order during 2020 or 2021; orYour gross receipts for 2020 fell below 50% for the same quarter in 2019 and fell listed below 80% for 2021.
Exactly how It Functions
Employee Retention Grant Program Eligible companies must fall into one of 2 classifications to certify for the credit: 1. Employer 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 exact same quarter in 2019 2021: eligible if gross receipts are down 20% or more versus very same quarter in 2019 2. Employers company is fully or partly suspended by government order due to COVID-19 throughout the calendar quarter. You will just be eligible for the period of time organization was completely or partially suspended Aggregation guidelines use when making these decisions.
2020 SIGNIFICANT DECLINE 2020 Significant Decline Example Employer As receipts were down 55% in Q2 of 2020 vs Q2 of 2019. Company A receives the credit in Q2. Company As invoices were only down 15% in Q3 of 2020 vs Q3 of 2019. Employer A receives the credit in Q3, but will NOT qualify in Q4 unless they again experience a 50% drop in receipts vs Q4 of 2019. If instead Employer As receipts 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 receipts.
2021 SIGNIFICANT DECLINE 2021 Significant Decline Details 1. Can elect to base your eligibility on the previous quarters decline in gross invoices i.e. I can identify 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 required to utilize this approach in all future quarters once the election is made 2. If an employer did not exist in the start of the very same quarter in 2019, the same quarter in 2020 is substituted.
COMPLETE OR PARTIAL GOVERNMENT SHUTDOWN Shutdown due to Federal, State or Local Government order that restricts group, travel, or commerce meetings due to COVID-19 and that order effects operations, hours, etc. Examples: order to shutdown non-essential businesses, government imposed curfews, local health department mandate to close for cleaning/disinfecting Not qualified if company willingly suspends operation or minimizes hours.
Does the company have sufficient teleworking capabilities? Did you decrease your open hours in order to do a deep clean to comply? Did you require that company be performed only by appointment (previously had walk-in ability) 9.
NOMINAL EFFECT SAFE HARBOR 10% or more reduction in the ability to provide items and services in the normal course of the companies service considered partly shut down by a federal government order. Exceptions: 1. Due to the fact that consumers were not out, if your business just reduced. Should have some sort of factor directly associated to a government order. 2. Needing someone to wear a mask or gloves will not have a nominal impact.
2020: eligible when gross invoices are down 50% versus the same quarter in 2019 continue to certify up until the quarter AFTER invoices are more than 80% versus the exact 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 government order due to COVID-19 throughout the calendar quarter. If instead Employer As receipts were down 25% in Q3 of 2020 vs Q3 of 2019, Employer A would certify for the credit in Q3 and in Q4, regardless of Q4 gross receipts.
Can choose to base your eligibility on the previous quarters decrease 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 technique in all future quarters once the election is made 2. If an employer did not exist in the beginning of the same quarter in 2019, the same quarter in 2020 is substituted.2020: eligible once gross invoices are down 50% versus the very same quarter in 2019 continue to certify up until the quarter AFTER invoices are more than 80% versus the exact same quarter in 2019 2021: eligible if gross invoices are down 20% or more versus exact same quarter in 2019 2. Companies organization is totally or partly suspended by government order due to COVID-19 throughout the calendar quarter.
2020 SIGNIFICANT DECLINE 2020 Significant Decline Example Employer As receipts were down 55% in Q2 of 2020 vs Q2 of 2019. Employer A qualifies for the credit in Q2. Employer As invoices were only down 15% in Q3 of 2020 vs Q3 of 2019. Company A gets approved for the credit in Q3, but will NOT qualify 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 get approved for the credit in Q3 and in Q4, despite Q4 gross invoices.
2021 SIGNIFICANT DECLINE 2021 Significant Decline Details 1. Can choose to base your eligibility on the previous quarters decline 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 needed to use this technique in all future quarters once the election is made 2. The very same quarter in 2020 is substituted if an employer did not exist in the start of the exact same quarter in 2019.
FULL 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 impacts operations, hours, etc. Examples: order to shutdown non-essential organizations, federal government enforced curfews, regional health department mandate to close for cleaning/disinfecting Not qualified 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 tidy to comply? Did you require that service be performed just by visit (previously had walk-in ability) 9.
SMALL EFFECT SAFE HARBOR 10% or more decline in the ability to offer goods and services in the typical course of the employers organization considered partially closed down by a federal government order. Exceptions: 1. Because customers were not out, if your organization only decreased. Must have some sort of element directly related to a federal government order. 2. Requiring somebody to wear a mask or gloves will not have a nominal impact.
2020: eligible as soon as gross receipts are down 50% versus the very same quarter in 2019 continue to certify 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. Companies organization is completely or partially suspended by federal government order due to COVID-19 throughout the calendar quarter. If instead Employer As invoices were down 25% in Q3 of 2020 vs Q3 of 2019, Employer A would certify for the credit in Q3 and in Q4, regardless of Q4 gross receipts.
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 on 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. If an employer did not exist in the start of the very same quarter in 2019, the very same quarter in 2020 is replaced.
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About The Employee Retention Grant Program
Multiple locations or aggregated groups under different Govt. orders - If a few of the areas are partially closed down due to a government order AND business has a policy that the other places (not shut down) will abide by CDC or Homeland Security assistance, ALL areas will be considered partially shut down. Aggregated Group If a trade or company is operated 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 thought about to be partially suspended.
CREDIT CALCULATION 2020 credit is 50% of certified incomes paid during competent duration Up to $10,000 certified earnings per employee for the year max credit of $5,000 per employee in 2020 2021 credit is 70% of certified incomes paid throughout certified period Up to $10,000 per staff member PER quarter in which you are qualified max credit of $7,000 per staff member each eligible quarter in 2021.
QUALIFIED WAGES Gross incomes Employer contributions to medical insurance Doesn't include incomes utilized for PPP or any other credit (i.e. FFCRA) Doesn't consist of salaries paid to FORMER workers (i.e. severance) Doesn't include wages paid to owners member of the family Owners and partners themselves uncertain Qualified earnings restricted if thought about large company.
SMALL VS LARGE EMPLOYERS If you are a SMALL employer, salaries paid during eligible duration get approved for credit despite whether the employee is able to work 2020 Small Employer = 100 or less FULL TIME EMPLOYEES 2021 Small Employer = 500 or fewer FULL TIME EMPLOYEES If LARGE company, just incomes paid to those who are NOT working certify Aggregation guidelines use when making this determination.Full time employees Based on 2019 staff members Employee balancing 30+ hours/week or 130+ hours/month is full-time NOT an FTE calculation those under 30 hours/week not included in count.
CERTIFIED WAGES LARGE EMPLOYERS 1. Health insurance coverage paid while a staff member is out on furlough or only partly working is a qualifying wage. If partially working, then you designate the quantity of health insurance coverage to qualified and nonqualified wage.
Why Employee Retention Grant Program?
PPP V. ERC 1. If have not used for forgiveness, then do the applications together in order to make the most of the advantages of both programs. Make sure that you make the most of the nonpayroll expenses up to the 40% number on the PPP application. If you have used already, the payroll consisted of in the PPP application is prohibited from the ERC to the degree that it is required to calculate the forgiveness amount.
PPP V. ERC EXAMPLES ASSUME FULL FORGIVENESS 1. Example #1 Loan quantity - $100,000. Application used $100,000 of payroll just (not health or retirement or other costs). Might have included other expenses but didnt. Cant use any of the payroll for ERC. 2. Example #2 Loan amount - $100,000. Application used $150,000 of payroll just. $100,000 is disallowed, can use $50,000 for ERC. 3. Example #3 Loan quantity - $200,000. Application used $130,000 of payroll and $70,000 of other costs. $130,000 is prohibited. 4. Example #4 Loan quantity - $200,000. Application utilized $200,000 of payroll and $70,000 of other expenditures for a total of $270,000. $130,000 is disallowed and $70,000 is permitted. $130,000 is the minimum quantity of payroll expenses required to get complete forgiveness. 5. Example #5 Loan amount - $200,000. Application used $200,000 of payroll costs and $90,000 of other costs for a total of $290,000. $120,000 is disallowed and $80,000 is permitted. $200k * 60% minimum. Go to the minimum payroll expenses required.
Application used $100,000 of payroll only (not health or retirement or other expenditures). Application used $130,000 of payroll and $70,000 of other expenditures. Application utilized $200,000 of payroll and $70,000 of other costs for a total of $270,000. Application used $200,000 of payroll costs and $90,000 of other expenditures for a total of $290,000.
Just How to Get Started
HOW TO MAXIMIZE THE ERC WITH PPP 1. Owners family members cant get ERC Put all of their salaries to PPP, subject to PPP limits. 2. Schedule C or Partners with Self Employment (dispute is still out on the owner/employees) cant get ERC Put all of their self employment to PPP, based on PPP limits 3. Consider timing. Use all of the qualified 3rd and 4th quarter salaries toward the PPP and utilize the 2nd quarter incomes for the ERC if the shut down takes place in 2nd quarter. 4. Think about vacation/severance pay might not be qualified for ERC so put towards PPP.
INCOME TAX CONSEQUENCES Deductibility of wages: The amount of the credit reduces the total wage deduction, and thus reduces salaries for other functions, such as the R&D credit, or 199A NYS permits a subtraction adjustment to deduct the wages
DECLARING THE ERC 1. If previous quarter) 2, type 941 (or 941-X. No penalty enforced if do not pay in required social security taxes to the extent you certify for ERC i.e. if Employer A owes $20,000 in social security taxes but knows they will receive $12,000 in ERC credits in that quarter, they can pick to only pay in $8,000 and will not deal with charges for underpayment will declare the $12,000 credit on that quarters Form 941 3. Kind 7200 Advance Payment of Employer Credits i.e. if Employer A owes $20,000 in social security taxes but 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 file a form 7200 to collect the staying $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 period does the program cover?
The program started on March 13th, 2020 and right on September 30, 2021, for eligible businesses.
You can look for refunds for 2020 and also 2021 after December 31st of this year, into 2022 and 2023. And potentially beyond then also.
Many businesses have received reimbursements, and also others, along with reimbursements, also certified to continue getting ERC in every payroll they process to December 31, 2021, at about 30% of their payroll cost.
Some businesses have received reimbursements from $100,000 to $6 million.
Do we still certify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, companies can currently receive the ERC even if they currently got a PPP financing. Note, however, that the ERC will only use to incomes not made use of for the PPP.
sustain a 20% decline in gross receipts .
A government authority called for full or partial shutdown of your business during 2020 or 2021. This includes your procedures being limited by business, inability to travel or restrictions of team conferences.
- Gross receipt decrease standards is various for 2020 and also 2021, yet is determined against the existing quarter as compared to 2019 pre-COVID quantities:
- A government authority called for full or partial shutdown of your company during 2020 or 2021. This includes your procedures being restricted by business, failure to take a trip or restrictions of team conferences.
- Gross invoice reduction standards is various for 2020 as well as 2021, however is measured versus the present quarter as contrasted to 2019 pre-COVID amounts.
Do we still qualify if we stayed open throughout the pandemic?
Yes. To qualify, your organization should meet either one of the following standards:
- Experienced a decline in gross invoices by 20%, or
- Needed to change organization procedures because of federal government orders
Several things are taken into consideration as adjustments in organization procedures, including changes in task functions and also the acquisition of additional safety devices.