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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.
Assistance provided can include:
Dedicated professionals that will analyze very intricate program rules as well as will be available to address your inquiries, including:
What period does the program cover?
Clarkstown NY Employee Retention Tax Credit 2020
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 do not own a company, be sure to share this video with organization owners you understand, this video could literally be worth tens of thousands of dollars for them. And if you are a service owner and after you view this video you desire to talk with me and a member of my team, who will likewise be either a CPA like myself or an EA, shoot me an email, [email protected], tell me a little about your organization and your ballpark year-over-year revenue, and let's see if we can get some more cash back in your pocket since you can take this credit against your payroll taxes you pay by decreasing your required work tax deposits or you can request 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 type here or the Form 941 and all the payroll stuff because that's the things your CPA should stress over. In this video I want 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 told me about this?" so you can be notified and take ownership of your own tax situations, of your service's tax circumstance to produce more money flow in your company and more wealth on your own.
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About Employee Retention Tax Credit 2020
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 desire to say that nothing in this video is to be taken as legal or tax guidance, this video is for basic informative purposes only, yes, I am a tax and a cpa professional, but I am not your CPA nor your tax professional unless you have engaged my company. Another disclaimer here, for functions of this video I am presuming that if you're viewing this you are a small company owner, which for employee retention credit functions indicates one hundred or fewer staff members for purposes of the 2020 credit and five hundred or fewer workers for functions of the 2021 credit, if you have a company with over 5 hundred staff members I picture you have in-house counsel, in-house CPAs who are on top of this things, however I'm here for you small organization owners who may 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 just the nature of their business that your tax expert hasn't had the time to dig into the weeds here like I have.
So employee retention credit, why is it so financially rewarding for company owner in 2021 and why weren't we talking about it in 2020, it's been around ever since, considering that 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 since the CARES Act that was passed over a year ago in March 2020, but 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. Originally, in 2020, if you received a PPP loan as an employer, you were not eligible for the employee retention credit.
Essentially the employee retention credit had a glow-up between 2020 and 2021, it went from the nerdy lady with thick glasses and neglected eyebrows and her hair up in 2020 to the belle of the ball for service 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 Tax Credit 2020
Factor, the employee retention credit for both 2020 and 2021 is now readily available to PPP receivers, but of course you can't double dip. You can't get PPP for the hundred thousand dollars you paid your employees and then turn around and claim the employee retention credit on those salaries. The government does not look too fondly on paying your payroll for you through the PPP and then you declaring a credit against the taxes you pay the government on those wages that the federal government paid for you. 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 however likewise maximize your employee retention credit.
For PPP forgiveness, you desire to fill up that payroll pail with as lots of expenses as possible that don't count for employee retention credit purposes. For instance, you can't declare the employee retention credit on state joblessness insurance coverage contributions, however state unemployment insurance coverage contributions count towards PPP forgiveness, see? You 'd want to dump all your state joblessness insurance contributions on your PPP forgiveness application to leave as much common incomes 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 give you a deduction for these earnings that they already gave you a credit for? Alright, sorry for getting a little sidetracked there, I just like talking about this stuff, 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 qualify for the employee retention credit in 2021.
In 2021, for a quarter to certify for the employee retention credit, you only require to reveal a 20% decline in gross receipts compared to the same calendar quarter in 2019. So this indicates far more companies will qualify. My business, for instance, experienced a 26% decline in gross invoices, comparing Q1 2019 to Q1 2021, and it was a similar story last year too.
So I didn't get approved for the 2020 employee retention credit initially, because I got preliminary of PPP cash and second due to the fact that my service didn't suffer that large 50% decline needed to receive the employee retention credit last year.But for 2021, a minimum of 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 invoices aren't a minimum of 20% lower than your Q1 2019 gross receipts, you can compare for functions of figuring out eligibility for the employee retention credit for Q1 2021, you can compare Q4 2020 to Q4 2019. Ramification here is that if you receive Q1 2021 based on Q1 2021's gross invoices, you will also get approved for Q2 2021 because 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 certify for Q1 and Q3 2021, you likewise certify for Q2 and Q4 based upon the lookback. Even if you didn't have an enough decline in revenue, you can certify for 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 eligible for the employee retention credit throughout that duration of complete or partial shutdown.
Typical example, you own a dining establishment, and your governor signed an executive order mentioning that you require to close down indoor dining. That is an example of a partial shutdown. Also, not just are more organizations eligible for the employee retention credit thanks to these new laws, making PPP receivers qualified for the employee retention credit though not on the same earnings and making more organizations 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 due to the fact that for 2021, the credit is equal to 70% of certified wages per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in salaries per employee ... 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 earnings per worker per quarter, so we're talking about a maximum credit of $7,000 per staff member per quarter. That's right, folks, the maximum 2021 employee retention credit is $28,000 per employee.
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 full PPP forgiveness however likewise optimize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just love talking about this stuff, but let's talk about another factor why the employee retention credit is more attractive now than it was last year, and that is that it's much easier to certify for the employee retention credit in 2021. I didn't qualify for the 2020 employee retention credit initially, because I got very first round of PPP cash and second because my company didn't suffer that big 50% decrease needed to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my service certifies. Not just are more organizations qualified for the employee retention credit thanks to these new laws, making PPP recipients eligible for the employee retention credit though not on the exact same incomes and making more organizations eligible through the 20% decrease threshold rather than the 50% decrease limit, but the 2021 credit is likewise more profitable than the 2020 credit.
Not bad, but 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, restricted to $10,000 in incomes per staff member ... for that whole time duration?
Exactly How to Begin
That will certainly work out on behalf of their customers to get the ideal prices feasible for their existing clients. They will certainly examine old invoices for errors obtaining their clients refunds and tax credits.
Assistance provided can include:
Dedicated professionals that will analyze very intricate program rules as well as will be available to address your inquiries, including:
How does the PPP lending aspect into the ERC?
What are the distinctions between the 2020 and 2021 programs as well as exactly how does it put on your company?
What are aggregation guidelines for bigger, multi-state employers, and exactly how do I translate multiple states executive orders?
How do part-time, Union, as well as tipped workers influence the quantity of my reimbursements?
Detailed assessment regarding your qualification
Extensive analysis of your situation
Assistance on the claiming process and documents
Certain program experience that a regular certified public accountant or payroll processor could not be well-versed in
Smooth and rapid end-to-end procedure, from eligibility to claiming as well as getting reimbursements
| Adams Brown Strategic Allies and CPAs https://www.adamsbrowncpa.com/ertc-tax-credit-consulting-new-york/ |
| 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 Start? Its Simple.
1. Whichever business you select to work with will certainly figure out whether your service certifies and gets approvel for the ERC.
2. They will examine your case and compute the maximum amount you can get.
3. Their group guides you with the declaring process, from beginning to end, including appropriate paperwork.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program started on March 13th, 2020 and also right on September 30, 2021, for qualified companies.
You can get refunds for 2020 and also 2021 after December 31st of this year, into 2022 as well as 2023. As well as possibly past after that as well.
Many services have received refunds, as well as others, along with refunds, also certified to proceed receiving ERC in every pay-roll they refine to December 31, 2021, at about 30% of their payroll cost.
Some companies have gotten refunds 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 certify for the ERC also if they currently received a PPP lending. Note, however, that the ERC will just apply to salaries not utilized for the PPP.
sustain a 20% decrease in gross invoices .
A federal government authority needed full or partial shutdown of your business during 2020 or 2021. This includes your operations being limited by commerce, inability to travel or constraints of team conferences.
- Gross receipt reduction standards is different for 2020 as well as 2021, however is gauged versus the existing quarter as compared to 2019 pre-COVID quantities:
- A federal government authority needed complete or partial shutdown of your service during 2020 or 2021. This includes your operations being restricted by commerce, lack of ability to take a trip or constraints of group conferences.
- Gross invoice decrease criteria is different for 2020 and also 2021, yet is determined against the existing quarter as contrasted to 2019 pre-COVID quantities.
Do we still qualify if we continued to be open throughout the pandemic?
Yes. To certify, your service needs to meet either among the following criteria:
- Experienced a decrease in gross invoices by 20%, or
- Needed to transform company operations because of government orders
Many products are taken into consideration as changes in service procedures, including changes in work functions and also the purchase of additional safety devices.