Home >> Employee Retention >> New York >> Greenburgh >> 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.
Assistance offered can include:
Devoted professionals that will analyze highly complicated program regulations as well as will certainly be readily available to answer your inquiries, including:
What duration does the program cover?
Greenburgh 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.
Exactly How It Works
Even if you do not own an organization, be sure to share this video with organization owners you understand, this video might literally be worth 10s of thousands of dollars for them. And if you are a service owner and after you watch 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 company and your ballpark year-over-year profits, 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 required employment 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 things your CPA must worry about, I am not going to get into the intricacies of that kind here or the Form 941 and all the payroll things. In this video I want to tell you what you require to understand so you can go to your CPA and say, "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 circumstances, of your service's tax circumstance to create more money flow in your company and more wealth for yourself.
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About Employee Retention Qualifications
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 state that nothing in this video is to be taken as legal or tax recommendations, this video is for basic informative purposes just, yes, I am a CPA and a tax professional, 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 presuming that if you're seeing this you are a small company owner, which for employee retention credit purposes suggests one hundred or fewer employees for purposes of the 2020 credit and five hundred or fewer workers for functions of the 2021 credit, if you have a business with over five hundred employees I envision you have in-house counsel, in-house CPAs who are on top of this things, however I'm here for you little organization owners who may deal with a regional tax expert who is so neck-deep in tax returns today because the federal government extended the tax due date to May 17 or volume is simply the nature of their organization that your tax specialist hasn't had the time to dig into the weeds here like I have.
So employee retention credit, why is it so lucrative for business owners in 2021 and why weren't we speaking about it in 2020, it's been around ever since, since 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 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 in 2015 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 qualified for the employee retention credit.
Basically the employee retention credit had a glow-up in between 2020 and 2021, it went from the unpopular lady with unkempt eyebrows and thick glasses and her hair up in 2020 to the belle of the ball for business 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 Qualifications
First reason, the employee retention credit for both 2020 and 2021 is now offered to PPP recipients, however obviously 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 earnings. The federal government doesn't look too fondly on paying your payroll for you through the PPP and after that you claiming a credit versus the taxes you pay the government on those wages that the federal government spent for you. That makes sense. Now, there's some preparation here. If you got PPP and you are qualified for the employee retention credit, then when you do your PPP forgiveness application, you require to select the very best covered period that will get you full PPP forgiveness however also optimize your employee retention credit.
For PPP forgiveness, you want to fill up that payroll bucket with as many expenses as possible that don't count for employee retention credit functions. For instance, you can't declare the employee retention credit on state unemployment insurance contributions, however state unemployment insurance contributions count towards PPP forgiveness, see? So you 'd wish to dump all your state unemployment insurance coverage contributions on your PPP forgiveness application to leave as much common salaries as possible to take the employee retention credit on.
Another thing to note is you can't subtract the salaries you claimed the employee retention credit on, and that makes sense as well, why should the federal government provide you a reduction for these salaries that they already provided you a credit for? Alright, sorry for getting a little sidetracked there, I simply enjoy talking about this things, however let's talk about another reason 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.
However in 2021, for a quarter to receive the employee retention credit, you only need to reveal a 20% decrease in gross receipts compared to the same calendar quarter in 2019. This implies far more services will certify. My organization, for example, experienced a 26% decrease in gross receipts, comparing Q1 2019 to Q1 2021, and it was a similar story last year too.
I didn't certify for the 2020 employee retention credit initially, due to the fact that I got first round of PPP money and 2nd because 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. For 2021, for any quarter, you can elect to utilize the lookback quarter, suggesting that, for example, even if your Q1 2021 gross invoices aren't at least 20% lower than your Q1 2019 gross invoices, 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 certify for Q1 2021 based upon Q1 2021's gross invoices, you will likewise certify for 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 essentially if you simply receive Q1 and Q3 2021, you likewise qualify for Q2 and Q4 based on the lookback. Also, even if you didn't have an adequate decline in profits, you can receive the employee retention credit if you were required to fully or partly suspend operations in your business during any calendar quarter in 2020 or 2021 due to state or federal orders, in which case you are qualified for the employee retention credit during that period of partial or complete shutdown.
Common example, you own a restaurant, and your governor signed an executive order mentioning that you require to close down indoor dining. That is an example of a partial shutdown. Likewise, not just are more companies qualified for the employee retention credit thanks to these brand-new laws, making PPP recipients eligible for the employee retention credit though not on the very same salaries and making more organizations eligible through the 20% decline limit instead of the 50% decrease limit, but the 2021 credit is also more profitable than the 2020 credit.
This is because for 2020, the employee retention credit amounted to 50% of all certified earnings for 2020, the employee retention credit was equivalent to 50% of all certified salaries you paid employees between March 12, 2020, and December 31, 2020, with a limit of $10,000 in earnings for that entire time duration. So the optimum 2020 credit per employee was $5,000. Okay, but that's absolutely nothing compared to the 2021 credit due to the fact that for 2021, the credit amounts to 70% of certified salaries per worker paid from January 1, 2021 through December 31, 2021, limited to $10,000 in salaries per staff member ... for that whole period? No. Per quarter. So for 2021 the portion is more (70% in 2021 vs. 50% in 2020) and you can take it on approximately $10,000 in earnings per worker per quarter, so we're discussing an optimum credit of $7,000 per employee per quarter. $7,000 times 4 is $28,000 if you're eligible all 4 quarters. That's right, folks, the maximum 2021 employee retention credit is $28,000 per staff member. That's big. That's a godsend to numerous company owner today. So you see what I indicate now, right, how the employee retention credit has gone from ugly duckling in 2020 to lovely swan in 2021, right? And by the way, by the way, certified incomes consists of employer-paid health insurance coverage premiums.
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 period that will get you full PPP forgiveness however likewise maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I simply enjoy talking about this stuff, but 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 simpler to qualify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit first, since I got very first round of PPP cash and second due to the fact that my organization didn't suffer that big 50% decline needed to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my service qualifies. Not only are more services eligible for the employee retention credit thanks to these brand-new laws, making PPP receivers qualified for the employee retention credit though not on the same salaries and making more companies eligible through the 20% decrease limit rather than the 50% decline limit, however the 2021 credit is likewise more rewarding 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 incomes per employee paid from January 1, 2021 through December 31, 2021, limited to $10,000 in salaries per worker ... for that whole time period?
Just How to Start
The very best method is to deal with a no-risk, contingency-based cost savings company. That will discuss on behalf of their customers to get the most effective rates feasible for their existing clients. They will investigate old billings for errors obtaining for their clients refunds and also credits. They can increase the earnings as well as general valuation of their clients companies.
Assistance offered can include:
Devoted professionals that will analyze highly complicated program regulations as well as will certainly be readily available to answer your inquiries, including:
Just how does the PPP lending aspect into the ERC?
What are the distinctions in between the 2020 as well as 2021 programs and just how does it put on your company?
What are gathering rules for larger, multi-state employers, and also just how do I interpret multiple states executive orders?
How do part-time, Union, as well as tipped workers impact the amount of my reimbursements?
Detailed analysis concerning your qualification
Comprehensive analysis of your case
Support on the asserting process and also paperwork
Specific program experience that a routine certified public accountant or pay-roll processor could not be well-versed in
Smooth as well as fast end-to-end process, from qualification to declaring and receiving 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/ |
All Set To Start? Its Simple.
1. Whichever business you select to work with will certainly figure out whether your business qualifies for the ERC.
2. They will certainly evaluate your claim and also compute the optimum quantity you can obtain.
3. Their team guides you through the asserting process, from starting to finish, including appropriate documents.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program began on March 13th, 2020 as well as ends on September 30, 2021, for qualified businesses.
You can obtain reimbursements for 2020 and also 2021 after December 31st of this year, into 2022 and also 2023. As well as potentially past then too.
Many organizations have received refunds, and others, along with refunds, also certified to proceed receiving ERC in every pay-roll they refine to December 31, 2021, at around 30% of their pay-roll expense.
Some organizations have actually gotten refunds from $100,000 to $6 million.
Do we still certify if we currently took the PPP?
Yes. Under the Consolidated Appropriations Act, organizations can currently get approved for the ERC also if they already got a PPP finance. Note, though, that the ERC will just use to incomes not utilized for the PPP.
Do we still certify if we did not incur a 20% decline in gross invoices .
A government authority needed full or partial closure of your service throughout 2020 or 2021. This includes your procedures being limited by commerce, failure to take a trip or constraints of team meetings.
- Gross invoice reduction standards is various for 2020 and 2021, yet is determined against the present quarter as contrasted to 2019 pre-COVID quantities:
- A government authority required partial or full closure of your company throughout 2020 or 2021. This includes your operations being restricted by business, inability to take a trip or restrictions of group conferences.
- Gross invoice reduction standards is different for 2020 and 2021, yet is measured against the present quarter as compared to 2019 pre-COVID quantities.
Do we still qualify if we remained open during the pandemic?
Yes. To qualify, your business needs to fulfill either one of the adhering to criteria:
- Experienced a decline in gross receipts by 20%, or
- Had to change company operations due to government orders
Numerous items are considered as adjustments in business operations, including shifts in work functions as well as the purchase of additional protective devices.