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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.
Because that's the stuff your CPA ought to fret about, I am not going to get into the complexities of that type here or the Form 941 and all the payroll things. In this video I want to inform 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?" so you can be notified and take ownership of your own tax situations, of your company's tax circumstance to produce more capital in your organization and more wealth on your own.
Solutions provided can include:
Devoted experts that will certainly interpret highly complex program rules and also will be readily available to address your inquiries, including:
What period does the program cover?
Forest Hills NY Employee Retention Qualifications
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
This is big, a great deal of small company owners do not know about this, or they've heard about it, but they do not understand much about it, even lots of tax experts do not understand the ins and outs of this thing due to the fact that it's brand-new and a great deal of these modifications
that are useful to entrepreneur occurred in the middle of tax season. In this video I'm going to dig into the employee retention credit, why it's so lucrative now in 2021, more rewarding, far more profitable, in truth now than it was in 2020, 5x more rewarding at least. Even if you do not own a business, be sure to share this video with service owners you know, this video might literally be worth tens of thousands of dollars for them. And if you are an entrepreneur and after you see 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 e-mail, [email protected], inform me a little about your business and your ballpark year-over-year income, and let's see if we can get some more cash back in your pocket due to the fact that you can take this credit versus your payroll taxes you pay by reducing your needed work tax deposits or you can ask for 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 ought to fret about, I am not going to get into the complexities of that type here or the Form 941 and all the payroll things. In this video I want to inform 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?" so you can be notified and take ownership of your own tax situations, of your company's tax circumstance to produce more capital in your organization and more wealth on your own.
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About Employee Retention Qualifications
Alright, now let's dig into this and let's speak about the employee retention credit or the ERC as some folks like to call it, before I enter this, I wish to state that absolutely nothing in this video is to be taken as legal or tax recommendations, this video is for basic educational purposes just, yes, I am a tax and a cpa professional, but I am not your CPA nor your tax expert unless you have actually engaged my company as such. Another disclaimer here, for purposes of this video I am presuming that if you're enjoying this you are a little service owner, which for employee retention credit functions implies one hundred or less staff members for purposes of the 2020 credit and 5 hundred or less staff members for purposes of the 2021 credit, if you have a business with over 5 hundred workers I picture you have in-house counsel, in-house CPAs who are on top of this things, however I'm here for you little company owners who might deal with a local tax expert who is so neck-deep in tax returns right now because the government extended the tax due date to May 17 or volume is simply the nature of their business that your tax specialist hasn't had the time to dig into the weeds here like I have.
Employee retention credit, why is it so profitable for organization owners in 2021 and why weren't we talking about it in 2020, it's been around considering that then, given that the CARES Act? Yes, the employee retention credit has actually been around given 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 since of the PPP, the Paycheck Protection Program.
Basically the employee retention credit had a glow-up between 2020 and 2021, it went from the nerdy lady with thick glasses and unkempt eyebrows and her hair up in 2020 to the belle of the ball for company owners in 2021. Why is the employee retention credit more appealing now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act?
Why Employee Retention Qualifications
Reason, the employee retention credit for both 2020 and 2021 is now available to PPP recipients, however of course you can't double dip. You can't get PPP for the hundred thousand dollars you paid your staff members and then turn around and claim the employee retention credit on those incomes. The government does not look too fondly on paying your payroll for you through the PPP and then you claiming a credit against the taxes you pay the government on those salaries that the government spent 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 pick the best covered period that will get you complete PPP forgiveness however likewise maximize your employee retention credit.
For PPP forgiveness, you want to fill up that payroll container with as numerous costs as possible that do not count for employee retention credit purposes. You can't declare the employee retention credit on state joblessness insurance contributions, but state joblessness insurance coverage contributions count towards PPP forgiveness, see? You 'd desire to dump all your state unemployment insurance contributions on your PPP forgiveness application to leave as much regular incomes as possible to take the employee retention credit on.
Another thing to note is you can't deduct the salaries you declared the employee retention credit on, and that makes sense as well, why should the government provide you a deduction for these wages that they already gave 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 attractive now than it was last year, and that is that it's much easier to certify for the employee retention credit in 2021.
But in 2021, for a quarter to receive the employee retention credit, you only require to reveal a 20% decline in gross receipts compared to the exact same calendar quarter in 2019. This implies far more companies will qualify. My business, for example, experienced a 26% decrease in gross invoices, comparing Q1 2019 to Q1 2021, and it was a comparable story last year too.
I didn't qualify for the 2020 employee retention credit initially, due to the fact that I got first round of PPP money and second since my organization didn't suffer that big 50% decline required to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my organization certifies. Likewise, for 2021, for any quarter, you can choose to utilize the lookback quarter, implying that, for example, even if your Q1 2021 gross invoices aren't at least 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. Implication here is that if you get approved for Q1 2021 based upon Q1 2021's gross receipts, you will likewise receive Q2 2021 considering that you certified in the lookback quarter of Q1 2021.
Very same thing for Q2 to Q3 and Q3 to Q4, so generally if you just receive 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 qualify for the employee retention credit if you were required to completely or partially suspend operations in your service 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 full or partial shutdown.
Typical example, you own a dining establishment, and your guv signed an executive order stating that you need to close down indoor dining. That is an example of a partial shutdown. Not only are more services qualified for the employee retention credit thanks to these brand-new laws, making PPP recipients qualified for the employee retention credit though not on the very same salaries and making more organizations eligible through the 20% decrease limit rather than the 50% decline limit, however the 2021 credit is also more profitable than the 2020 credit.
Not bad, however that's absolutely nothing compared to the 2021 credit since for 2021, the credit is equal to 70% of qualified salaries 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 portion is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in incomes per employee per quarter, so we're talking about a maximum 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 require to select the finest covered duration that will get you full PPP forgiveness but also optimize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I simply like talking about this stuff, 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 certify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit first, because I got first round of PPP money and second 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. Not just are more businesses eligible for the employee retention credit thanks to these new laws, making PPP receivers eligible for the employee retention credit though not on the exact same earnings and making more organizations eligible through the 20% decrease limit rather than the 50% decrease limit, however the 2021 credit is likewise more lucrative 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 salaries per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in wages per staff member ... for that whole time duration?
Exactly How to Start
The very best means is to deal with a no-risk, contingency-based price savings firm. That will work out on behalf of their customers to get the most effective costs feasible for their existing customers. They will examine old invoices for errors getting their customers reimbursements and credits. They can boost the productivity and overall assessment of their clients organizations.
Solutions provided can include:
Devoted experts that will certainly interpret highly complex program rules and also will be readily available to address your inquiries, including:
Exactly how does the PPP lending factor into the ERC?
What are the differences in between the 2020 and 2021 programs as well as exactly how does it put on your organization?
What are gathering policies for bigger, multi-state companies, as well as just how do I analyze multiple states executive orders?
How do part-time, Union, as well as tipped workers affect the amount of my refunds?
Complete analysis regarding your qualification
Detailed analysis of your claim
Assistance on the declaring process as well as documents
Specific program knowledge that a routine certified public accountant or payroll cpu could not be well-versed in
Smooth and also quick end-to-end procedure, from qualification to claiming as well as receiving 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 choose to work with will certainly figure out whether your business certifies for the ERC.
2. They will analyze your case and also calculate the optimum amount you can get.
3. Their group overviews you through the declaring process, from starting to finish, including proper documentation.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program began on March 13th, 2020 and ends on September 30, 2021, for qualified companies.
You can look for refunds for 2020 and 2021 after December 31st of this year, into 2022 and also 2023. And also potentially past after that as well.
Many companies have received refunds, and also others, along with reimbursements, also certified to continue getting ERC in every payroll they process to December 31, 2021, at close to 30% of their payroll cost.
Some organizations have actually obtained reimbursements from $100,000 to $6 million.
Do we still certify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, services can currently get approved for the ERC even if they currently got a PPP car loan. Keep in mind, however, that the ERC will only use to salaries not utilized for the PPP.
maintain a 20% reduction in gross receipts .
A federal government authority required full or partial closure of your organization during 2020 or 2021. This includes your operations being limited by business, inability to travel or limitations of team meetings.
- Gross receipt reduction standards is different for 2020 and 2021, but is determined against the existing quarter as compared to 2019 pre-COVID amounts:
- A federal government authority called for full or partial shutdown of your organization throughout 2020 or 2021. This includes your operations being restricted by commerce, lack of ability to travel or constraints of team conferences.
- Gross invoice reduction criteria is various for 2020 and also 2021, however is gauged versus the existing quarter as compared to 2019 pre-COVID amounts.
Do we still qualify if we remained open throughout the pandemic?
Yes. To certify, your organization has to meet either among the following standards:
- Experienced a decline in gross invoices by 20%, or
- Had to transform company operations because of federal government orders
Several items are considered as modifications in company procedures, including changes in task roles and the acquisition of added protective devices.