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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.
Since that's the things your CPA should worry about, I am not going to get into the intricacies of that type here or the Form 941 and all the payroll stuff. In this video I wish to tell you what you need to understand so you can go to your CPA and state, "Hey, what about this employee retention credit, why haven't you informed me about this?" You can be informed and take ownership of your own tax circumstances, of your company's tax circumstance to generate more money flow in your company and more wealth for yourself.
Services offered can include:
Committed experts that will certainly analyze highly intricate program guidelines as well as will be readily available to address your inquiries, including:
What period does the program cover?
Greenburgh 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.
How It Functions
This is huge, a great deal of small company owners don't understand about this, or they've found out about it, however they do not know much about it, even many tax specialists do not know the ins and outs of this thing since it's brand-new and a lot of these changes
that are useful to entrepreneur happened in the middle of tax season. So in this video I'm going to go into the employee retention credit, why it's so lucrative now in 2021, more financially rewarding, far more financially rewarding, in truth now than it was in 2020, 5x more rewarding a minimum of. So even if you do not own an organization, make sure to share this video with company owner you understand, this video could literally deserve 10s of countless dollars for them. And if you are a business owner and after you watch 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 company and your ballpark year-over-year income, and let's see if we can get some more cash back in your pocket because you can take this credit versus your payroll taxes you pay by lowering your required employment tax deposits or you can ask for an advance payment of the credit using IRS Form 7200, Advance Payment of Employer Credits Due to COVID-19. Since that's the things your CPA should worry about, I am not going to get into the intricacies of that type here or the Form 941 and all the payroll stuff. In this video I wish to tell you what you need to understand so you can go to your CPA and state, "Hey, what about this employee retention credit, why haven't you informed me about this?" You can be informed and take ownership of your own tax circumstances, of your company's tax circumstance to generate more money flow in your company and more wealth for yourself.
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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, before I get into this, I desire to state that nothing in this video is to be taken as legal or tax advice, this video is for basic educational purposes only, yes, I am a CPA and a tax professional, but I am not your CPA nor your tax expert unless you have engaged my company. Another disclaimer here, for purposes of this video I am presuming that if you're viewing this you are a small company owner, which for employee retention credit purposes suggests one hundred or fewer employees for functions of the 2020 credit and five hundred or fewer workers for functions of the 2021 credit, if you have a company with over five hundred workers I imagine you have in-house counsel, in-house CPAs who are on top of this things, however I'm here for you small company owners who may work with a regional tax professional who is so neck-deep in income tax return right now due to the fact that the federal government extended the tax deadline to May 17 or volume is just the nature of their company that your tax expert hasn't had the time to dig into the weeds here like I have.
Employee retention credit, why is it so lucrative for organization owners in 2021 and why weren't we talking about it in 2020, it's been around since 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 due to the fact that of the PPP, the Paycheck Protection Program.
However the stimulus bill passed in December, the Consolidated Appropriations Act, in addition to the American Rescue Plan Act, passed in February 2021, made changes to the ERC making it far more appealing. Basically the employee retention credit had a glow-up in between 2020 and 2021, it went from the nerdy woman with unkempt eyebrows and thick glasses and her hair up in 2020 to the belle of the ball for company owners in 2021. Why? Why is the employee retention credit more appealing now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act? I'll tell you why, a few factors.
Why Employee Retention Tax Credit 2020
Reason, the employee retention credit for both 2020 and 2021 is now available to PPP recipients, but of course you can't double dip. You can't get PPP for the hundred thousand dollars you paid your staff members and after that turn around and claim the employee retention credit on those earnings as well. The 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 government spent for you. So that makes good 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 need to pick the best covered duration that will get you complete PPP forgiveness however likewise maximize your employee retention credit.
Also, for PPP forgiveness, you wish to fill that payroll bucket with as lots of costs as possible that do not count for employee retention credit functions. For instance, you can't declare the employee retention credit on state unemployment insurance contributions, but state unemployment insurance coverage contributions count towards PPP forgiveness, see? You 'd want to dump all your state unemployment insurance contributions on your PPP forgiveness application to leave as much regular salaries as possible to take the employee retention credit on.
Another thing to note is you can't deduct the incomes you claimed the employee retention credit on, and that makes sense as well, why should the government offer you a reduction for these salaries that they already provided you a credit for? Alright, sorry for getting a little sidetracked there, I simply like 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 easier to certify for the employee retention credit in 2021.
But in 2021, for a quarter to receive the employee retention credit, you only need to show a 20% decrease in gross receipts compared to the very same calendar quarter in 2019. This indicates far more services will certify. My company, for example, experienced a 26% decrease in gross invoices, comparing Q1 2019 to Q1 2021, and it was a similar story in 2015 too.
I didn't certify for the 2020 employee retention credit first, because I got first round of PPP money and 2nd because my business 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 company certifies. Also, for 2021, for any quarter, you can elect to use the lookback quarter, meaning that, for instance, even if your Q1 2021 gross receipts aren't a minimum of 20% lower than your Q1 2019 gross receipts, you can compare for functions of identifying 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 receipts, you will likewise certify for Q2 2021 since you certified in the lookback quarter of Q1 2021.
Very same thing for Q2 to Q3 and Q3 to Q4, so basically if you simply get approved for Q1 and Q3 2021, you likewise receive Q2 and Q4 based on the lookback. Even if you didn't have an adequate decline in revenue, you can qualify for the employee retention credit if you were needed to completely or partly suspend operations in your company during 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 partial or full shutdown.
Common example, you own a restaurant, and your guv signed an executive order specifying that you require to close down indoor dining. That is an example of a partial shutdown. Not only 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 exact same wages and making more organizations eligible through the 20% decrease threshold rather than the 50% decrease limit, however the 2021 credit is also more profitable than the 2020 credit.
This is due to the fact that 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 qualified wages you paid staff members between March 12, 2020, and December 31, 2020, with a limit of $10,000 in incomes for that whole period. The maximum 2020 credit per employee was $5,000. Okay, however that's absolutely nothing compared to the 2021 credit because for 2021, the credit amounts to 70% of certified earnings per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in earnings per worker ... for that whole period? No. Per quarter. 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 worker per quarter, so we're talking about an optimum credit of $7,000 per worker per quarter. $7,000 times four is $28,000 if you're eligible all four quarters. That's right, folks, the maximum 2021 employee retention credit is $28,000 per employee. That's big. That's a godsend to lots of entrepreneur today. So you see what I suggest now, right, how the employee retention credit has gone from unsightly duckling in 2020 to beautiful swan in 2021, right? And by the way, by the way, certified salaries consists of employer-paid health insurance coverage premiums.
If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you need to select the best covered duration that will get you complete PPP forgiveness but likewise 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 appealing now than it was last year, and that is that it's simpler to certify for the employee retention credit in 2021. I didn't qualify for the 2020 employee retention credit first, due to the fact that I got first round of PPP cash and 2nd since my organization didn't suffer that big 50% decline required to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my service qualifies. Not only are more companies eligible for the employee retention credit thanks to these brand-new laws, making PPP receivers eligible for the employee retention credit though not on the very same earnings and making more companies eligible through the 20% decline limit rather than the 50% decrease limit, but the 2021 credit is also more financially rewarding than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit because for 2021, the credit is equivalent to 70% of certified incomes per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in earnings per employee ... for that whole time duration?
Exactly How to Begin
The most effective means is to deal with a no-risk, contingency-based price financial savings company. That will certainly negotiate in behalf of their clients to obtain the finest rates feasible for their existing clients. They will investigate old billings for errors obtaining for their customers refunds as well as credits. They can increase the success and also general assessment of their customers organizations.
Services offered can include:
Committed experts that will certainly analyze highly intricate program guidelines as well as will be readily available to address your inquiries, including:
Just how does the PPP loan factor into the ERC?
What are the distinctions in between the 2020 and also 2021 programs and just how does it relate to your company?
What are aggregation policies for larger, multi-state employers, and exactly how do I translate several states executive orders?
Just how do part-time, Union, as well as tipped staff members affect the amount of my refunds?
Detailed examination concerning your qualification
Comprehensive analysis of your claim
Guidance on the claiming procedure and also documents
Certain program proficiency that a routine CPA or payroll cpu may not be well-versed in
Quick and smooth end-to-end process, from qualification to claiming and getting refunds
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| Disisaster Loan Advisors https://www.disasterloanadvisors.com/ |
| ERTC Filing https://info.ertcfiling.com/employee-retention-tax-credit-new-york-11368/ |
Ready To Obtain Begun? Its Simple.
1. Whichever company you choose to work with will certainly figure out whether your business certifies and gets approvel for the ERC.
2. They will evaluate your claim as well as calculate the optimum amount you can obtain.
3. Their group guides you via the declaring procedure, from starting to end, consisting of proper documentation.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program began on March 13th, 2020 and also right on September 30, 2021, for qualified employers.
You can look for reimbursements for 2020 and 2021 after December 31st of this year, into 2022 and 2023. And potentially past after that also.
Many businesses have received refunds, and others, along with reimbursements, additionally certified to proceed obtaining ERC in every pay-roll they refine to December 31, 2021, at about 30% of their pay-roll expense.
Some companies have actually obtained 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 qualify for the ERC also if they currently received a PPP car loan. Note, though, that the ERC will just put on wages not made use of for the PPP.
maintain a 20% decline in gross invoices .
A government authority called for complete or partial closure of your business during 2020 or 2021. This includes your operations being restricted by business, inability to travel or constraints of team conferences.
- Gross receipt reduction standards is different for 2020 and 2021, yet is measured against the current quarter as compared to 2019 pre-COVID quantities:
- A government authority called for partial or complete shutdown of your organization throughout 2020 or 2021. This includes your operations being restricted by business, inability to travel or limitations of group conferences.
- Gross receipt reduction standards is different for 2020 and also 2021, however is determined against the current quarter as compared to 2019 pre-COVID amounts.
Do we still certify if we continued to be open during the pandemic?
Yes. To certify, your organization needs to meet either among the adhering to criteria:
- Experienced a decrease in gross invoices by 20%, or
- Needed to transform company procedures because of federal government orders
Many items are taken into consideration as adjustments in company operations, consisting of changes in work duties and the purchase of additional safety equipment.