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Clay NY Employee Retention 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 Program is offered to both mid-sized and little business and is based upon qualified wages and health care paid to employees. Qualifying companies can benefit from the following offerings:
As much as$ 26,000 per employee
Readily available for 2020 and the first 3 quarters of 2021
Can certify with decreased income or COVID event
No limit on funding.EMPLOYEE RETENTION PROGRAM is a refundable tax creditThe ERC has gone through several changes and has lots of technical details, including how to identify qualified wages, which workers are qualified and more. Many Companies are availablt tohelps make sense of it all through devoted professionals that direct and describe the steps that need to be taken so service owners can optimize their claim.  “The employee retention program is a incredibly valuable and extremely under-utilized financial aid opportunity for small company owners to get from the government, explains Business Warrior CEO Rhett Doolittle. After determining this chance to help more small companies, developing a partnership with Bottom Line Savings was a no-brainer. Given that 2008, theyve recovered over $2.2 billion dollars for more than 7,000 clients consisting of American Express, Uber, and Rolex.To certify as an employer, service owners must meet the following:Experience changes 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 below 80% for 2021.

 

 


 How It Works
Employee Retention Program  Eligible companies must fall under one of 2 categories to qualify for the credit: 1. Company has a significant decline in gross receipts. 2020: eligible once gross receipts are down 50% versus the exact same quarter in 2019 continue to qualify up until the quarter AFTER receipts are more than 80% versus the exact same quarter in 2019 2021: eligible if gross invoices are down 20% or more versus same quarter in 2019 2. Companies service is completely or partly suspended by government order due to COVID-19 during the calendar quarter. When making these determinations, you will only be eligible for the period of time service was completely or partly suspended Aggregation guidelines apply.

2020 SIGNIFICANT DECLINE 2020 Significant Decline Example Employer As receipts were down 55% in Q2 of 2020 vs Q2 of 2019. Employer A receives the credit in Q2. Employer As invoices were just down 15% in Q3 of 2020 vs Q3 of 2019. Employer A certifies for the credit in Q3, but will NOT certify in Q4 unless they again experience a 50% drop in invoices vs Q4 of 2019. If rather 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 invoices.

2021 SIGNIFICANT DECLINE 2021 Significant Decline Details 1. Can elect 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 needed to use 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 exact same quarter in 2020 is substituted.

COMPLETE OR PARTIAL GOVERNMENT SHUTDOWN Shutdown due to Federal, State or Local Government order that restricts commerce, group, or travel conferences due to COVID-19 which order impacts operations, hours, and so on. Examples: order to shutdown non-essential services, government enforced curfews, regional health department required to close for cleaning/disinfecting Not qualified if employer voluntarily suspends operation or lowers hours.

PARTIAL SHUTDOWN - FACTORS TO CONSIDER MORE THAN A NOMINAL EFFECT 1. Does the company have sufficient teleworking abilities? 2. Is the staff members work portable? I.e. can it be done in the house. 3. Does the employee need to be in the physical workspace? (i.e. laboratories) 4. Existed a delay in getting your workers set up appropriately to telework? 5. Did your hours reduce due to a curfew? 6. Did you decrease your open hours in order to do a deep tidy to comply? 7. Did you require to restrict tenancy to offer for social distancing? 8. Did you need that service be performed only by visit (previously had walk-in ability) 9. Did you change your format of service? 10. Were you not able to obtain materials from your suppliers due to provider shut downs or border shut downs?

NOMINAL EFFECT SAFE HARBOR 10% or more decline in the capability to supply items and services in the regular course of the employers company thought about partly shut down by a government order. Exceptions: 1. Must have some sort of element directly associated to a government order.


2020: eligible when gross invoices are down 50% versus the very same quarter in 2019 continue to qualify up until the quarter AFTER invoices are more than 80% versus the same quarter in 2019 2021: eligible if gross invoices are down 20% or more versus exact same quarter in 2019 2. Companies service is totally or partially suspended by federal 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 elect to base your eligibility on the previous quarters decrease in gross receipts 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 approach in all future quarters once the election is made 2. If a company did not exist in the start of the same quarter in 2019, the very same quarter in 2020 is substituted.2020: eligible as soon as gross receipts are down 50% versus the very same quarter in 2019 continue to qualify till 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. Employers organization is fully or partly suspended by government order due to COVID-19 during the calendar quarter.

Employer A certifies for the credit in Q3, however will NOT certify in Q4 unless they again experience a 50% drop in invoices vs Q4 of 2019. If instead Employer As invoices were down 25% in Q3 of 2020 vs Q3 of 2019, Employer A would qualify for the credit in Q3 and in Q4, regardless of Q4 gross receipts.

2021 SIGNIFICANT DECLINE 2021 Significant Decline Details 1. Can elect to base your eligibility on the previous quarters decline in gross receipts 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 utilize this technique in all future quarters once the election is made 2. The same quarter in 2020 is substituted if a company did not exist in the beginning of the very same quarter in 2019.

COMPLETE OR PARTIAL GOVERNMENT SHUTDOWN Shutdown due to Federal, State or Local Government order that limits travel, commerce, or group meetings due to COVID-19 and that order impacts operations, hours, and so on. Examples: order to shutdown non-essential businesses, government enforced curfews, local health department mandate to close for cleaning/disinfecting Not qualified if employer voluntarily suspends operation or reduces hours.

Does the company have adequate teleworking capabilities? Did you decrease your open hours in order to do a deep tidy to comply? Did you require that company be carried out just by appointment (previously had walk-in ability) 9.

NOMINAL EFFECT SAFE HARBOR 10% or more decline in the ability to provide goods and services in the normal course of the employers organization considered partly shut down by a government order. Exceptions: 1. Since consumers were not out, if your organization just decreased. Need to have some sort of factor directly associated to a federal government order. 2. Requiring somebody to use a mask or gloves will not have a nominal result.


2020: eligible as soon as gross invoices are down 50% versus the exact same quarter in 2019 continue to certify 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 business is totally or partly suspended by government order due to COVID-19 during 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 invoices.

Can choose to base your eligibility on the previous quarters decline in gross receipts 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 utilize this method 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 replaced.

 

 
                                                                                                                                                        

About The Employee Retention Program

Several locations or aggregated groups under different Govt. orders  - If a few of the places are partially shut down due to a federal government order AND business has a policy that the other places (not close down) will adhere to CDC or Homeland Security assistance, ALL locations will be thought about partially closed down. Aggregated Group If a trade or company is operated by several 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 salaries paid throughout competent period Up to $10,000 qualified wages per employee for the year max credit of $5,000 per worker in 2020 2021 credit is 70% of qualified incomes paid throughout competent period Up to $10,000 per worker PER quarter in which you are qualified max credit of $7,000 per worker each qualified quarter in 2021.

QUALIFIED WAGES Gross wages Employer contributions to medical insurance Doesn't include salaries used for PPP or any other credit (i.e. FFCRA) Doesn't consist of salaries paid to FORMER staff members (i.e. severance) Doesn't include wages paid to owners relative Owners and spouses themselves uncertain Qualified salaries restricted if thought about large employer.

SMALL VS LARGE EMPLOYERS If you are a SMALL employer, salaries paid throughout eligible duration qualify for credit no matter whether the staff member has the ability to work 2020 Small Employer = 100 or less FULL TIME EMPLOYEES 2021 Small Employer = 500 or fewer FULL TIME EMPLOYEES If LARGE employer, only wages paid to those who are NOT working qualify Aggregation rules apply when making this determination.Full time staff members Based on 2019 employees Employee averaging 30+ hours/week or 130+ hours/month is full-time NOT an FTE estimation those under 30 hours/week not consisted of in count.

CERTIFIED WAGES LARGE EMPLOYERS 1. Partial Day of work/paid complete day - The quantity of wage attributable to the not working is a certifying wage. Even if the staff member is working a partial day, the part that is associated to the not working will be considered a certifying wage. 2. Payment of holiday, sick, PTO, or severance is not a certifying wage for LARGE employers only 3. Medical insurance paid while an employee is out on furlough or just partially working is a certifying wage. If partly working, then you assign the quantity of health insurance coverage to qualified and nonqualified wage.




 

Why Employee Retention Program?

PPP V. ERC 1. If haven't used for forgiveness, then do the applications together in order to take full advantage of the advantages of both programs. Make sure that you optimize the nonpayroll expenses up to the 40% number on the PPP application. If you have actually applied currently, the payroll consisted of in the PPP application is disallowed from the ERC to the degree that it is required to compute the forgiveness amount.
PPP V. ERC EXAMPLES ASSUME FULL FORGIVENESS 1. Example #1 Loan quantity - $100,000. Application utilized $100,000 of payroll just (not health or retirement or other costs). Might have included other expenses however didnt. Cant use any of the payroll for ERC. 2. Example #2 Loan quantity - $100,000. Application utilized $150,000 of payroll only. $100,000 is prohibited, can utilize $50,000 for ERC. 3. Example #3 Loan amount - $200,000. Application used $130,000 of payroll and $70,000 of other expenditures. $130,000 is prohibited. 4. Example #4 Loan quantity - $200,000. Application used $200,000 of payroll and $70,000 of other expenditures for an overall of $270,000. $130,000 is disallowed and $70,000 is permitted. $130,000 is the minimum quantity of payroll costs needed to get full forgiveness. 5. Example #5 Loan amount - $200,000. Application utilized $200,000 of payroll costs and $90,000 of other expenditures for a total of $290,000. $120,000 is prohibited and $80,000 is enabled. $200k * 60% minimum. Go to the minimum payroll costs required.


Application utilized $100,000 of payroll only (not health or retirement or other costs). Application utilized $130,000 of payroll and $70,000 of other expenditures. Application used $200,000 of payroll and $70,000 of other costs for a total of $270,000. Application used $200,000 of payroll expenses and $90,000 of other expenditures for a total of $290,000.

 
           

Exactly How to Start

Owners relatives cant get ERC Put all of their salaries to PPP, subject to PPP limitations. Set Up C or Partners with Self Employment (dispute is still out on the owner/employees) cant get ERC Put all of their self work to PPP, subject to PPP limitations 3. If the shut down takes place in 2nd quarter, use all of the qualified 3rd and 4th quarter earnings towards the PPP and use the 2nd quarter salaries for the ERC.

INCOME TAX CONSEQUENCES Deductibility of wages: The amount of the credit decreases the overall wage reduction, and thus lowers salaries for other purposes, such as the R&D credit, or 199A NYS allows a subtraction modification to deduct the incomes

No penalty enforced if don't pay in required social security taxes to the extent you qualify for ERC i.e. if Employer A owes $20,000 in social security taxes however understands they will certify for $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. Form 7200 Advance Payment of Employer Credits i.e. if Employer A owes $20,000 in social security taxes however knows they will certify for a $25,000 in ERC credits in that quarter, they can pick not to pay in the SS taxes and can file a kind 7200 to collect the remaining $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


Directory For Employee Retention Program Companies Available in Clay NY
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/
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 duration does the program cover?

The program began on March 13th, 2020 as well as finishes on September 30, 2021, for qualified businesses.

You can obtain refunds for 2020 as well as 2021 after December 31st of this year, right into 2022 as well as 2023. And also potentially beyond then too.

Many businesses have received refunds, and others, along with reimbursements, likewise certified to continue receiving ERC in every payroll they process through December 31, 2021, at about 30% of their payroll cost.

Some organizations have obtained reimbursements from $100,000 to $6 million.
Do we still qualify if we already took the PPP?

Yes. Under the Consolidated Appropriations Act, businesses can currently get approved for the ERC even if they already obtained a PPP lending. Keep in mind, however, that the ERC will just relate to earnings not made use of for the PPP.

Do we still accredit if we did not incur a 20% decrease in gross invoices .

A government authority required partial or full shutdown of your service during 2020 or 2021. This includes your procedures being restricted by business, inability to travel or limitations of team conferences.

  • Gross invoice reduction requirements is various for 2020 and also 2021, yet is measured against the existing quarter as contrasted to 2019 pre-COVID amounts:

    • A federal government authority called for full or partial closure of your company during 2020 or 2021. This includes your procedures being restricted by business, failure to take a trip or restrictions of group meetings.
    • Gross receipt decrease requirements is different for 2020 as well as 2021, however is measured against the present quarter as compared to 2019 pre-COVID quantities.
Do we still certify if we remained open during the pandemic?

Yes. To certify, your service has to fulfill either among the following standards:

  • Experienced a decline in gross invoices by 20%, or
  • Needed to alter organization operations because of federal government orders

Many items are thought about as modifications in service procedures, including changes in job duties and also the acquisition of extra safety devices.