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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.
Solutions supplied can include:
Committed professionals that will translate extremely complicated program guidelines as well as will be offered to answer your questions, including:
What duration does the program cover?
Irondequoit NY Employee Retention 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
Even if you do not own a company, 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 a company 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 e-mail, [email protected], tell me a little about your organization and your ballpark year-over-year profits, and let's see if we can get some more money back in your pocket due to the fact that you can take this credit versus your payroll taxes you pay by reducing your needed employment 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.
Because that's the things your CPA need to fret about, I am not going to get into the intricacies of that form here or the Form 941 and all the payroll stuff. In this video I wish to tell you what you require to understand so you can go to your CPA and state, "Hey, what about this employee retention credit, why haven't you told 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 money circulation in your company and more wealth for yourself.
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About Employee Retention 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 state that nothing in this video is to be taken as legal or tax recommendations, this video is for basic educational functions just, yes, I am a tax and a certified public accountant expert, however I am not your CPA nor your tax professional unless you have actually engaged my firm. Another disclaimer here, for purposes of this video I am presuming that if you're enjoying this you are a small company owner, which for employee retention credit purposes means one hundred or fewer staff members for functions of the 2020 credit and 5 hundred or fewer employees for purposes of the 2021 credit, if you have a company with over 5 hundred employees I picture you have in-house counsel, in-house CPAs who are on top of this stuff, but I'm here for you small organization owners who may work with a local tax professional who is so neck-deep in income tax return today due to the fact that the federal government extended the tax deadline to May 17 or volume is simply the nature of their organization that your tax expert hasn't had the time to go into the weeds here like I have.
Employee retention credit, why is it so rewarding 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.
The stimulus costs passed in December, the Consolidated Appropriations Act, as well as the American Rescue Plan Act, passed in February 2021, made modifications to the ERC making it much more attractive. Basically the employee retention credit had a glow-up between 2020 and 2021, it went from the unpopular woman with thick glasses and unkempt eyebrows and her hair up in 2020 to the belle of the ball for organization 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 couple of reasons.
Why Employee Retention Credit 2020
Factor, the employee retention credit for both 2020 and 2021 is now readily available to PPP receivers, however 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. 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 best covered period that will get you full PPP forgiveness however likewise optimize your employee retention credit.
Also, for PPP forgiveness, you desire to fill that payroll pail with as numerous expenses as possible that do not count for employee retention credit purposes. You can't declare the employee retention credit on state unemployment insurance contributions, but state unemployment insurance contributions count towards PPP forgiveness, see? You 'd want to dump all your state joblessness insurance coverage contributions on your PPP forgiveness application to leave as much regular earnings as possible to take the employee retention credit on.
This can get really technical really fast and it's very circumstance particular in terms of optimizing PPP vs. ERC and my company has tools to figure this things out for you, I'm not going to dig into all that here, but simply know that you really have to do the mathematics when doing your PPP forgiveness to make sure you're not leaving anything on the table in terms of the employee retention credit. Another thing to note is you can't subtract the incomes you claimed the employee retention credit on, and that makes good sense too, why should the government give you a deduction for these wages that they currently offered you a credit for? Basically the credit is tax-effected. Alright, sorry for getting a little sidetracked there, I just enjoy talking about this stuff, however let's discuss another reason that the employee retention credit is more appealing now than it was in 2015, which is that it's simpler to certify for the employee retention credit in 2021. In 2020, for a quarter to receive the employee retention credit, you needed to show a 50% decrease in gross receipts compared to the same calendar quarter in 2019.
In 2021, for a quarter to certify for the employee retention credit, you only require to show a 20% reduction in gross receipts compared to the very same calendar quarter in 2019. So this suggests much more companies will certify. My organization, for instance, experienced a 26% decline in gross invoices, comparing Q1 2019 to Q1 2021, and it was a similar story last year too.
I didn't qualify for the 2020 employee retention credit initially, because I got very first round of PPP cash and second due to the fact that my business didn't suffer that large 50% decline needed to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my service certifies. For 2021, for any quarter, you can elect to use the lookback quarter, indicating 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 purposes of determining 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 on Q1 2021's gross receipts, you will also receive Q2 2021 because you qualified in the lookback quarter of Q1 2021.
Exact same thing for Q2 to Q3 and Q3 to Q4, so basically if you simply certify for Q1 and Q3 2021, you also certify for Q2 and Q4 based upon the lookback. Even if you didn't have a sufficient decrease in earnings, you can certify for the employee retention credit if you were needed to totally or partially suspend operations in your business 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 duration of partial or complete shutdown.
Common example, you own a restaurant, and your governor signed an executive order specifying 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 brand-new laws, making PPP recipients eligible for the employee retention credit though not on the exact same incomes and making more companies eligible through the 20% decrease limit instead of the 50% decline threshold, but the 2021 credit is also more financially rewarding than the 2020 credit.
Not bad, however that's nothing compared to the 2021 credit because for 2021, the credit is equal to 70% of qualified salaries per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in incomes per worker ... for that whole time period? For 2021 the percentage 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 qualified for the employee retention credit, then when you do your PPP forgiveness application, you require to select the finest covered period that will get you full PPP forgiveness but likewise maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just enjoy talking about this things, 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 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 very first round of PPP money and 2nd due to the fact that my company 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 just are more organizations 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 salaries and making more businesses eligible through the 20% decrease threshold rather than the 50% decrease threshold, but the 2021 credit is also more rewarding than the 2020 credit.
Not bad, however that's absolutely nothing compared to the 2021 credit since for 2021, the credit is equivalent to 70% of qualified earnings per worker paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in salaries per staff member ... for that entire time period?
Just How to Get going
The most effective means is to work with a no-risk, contingency-based cost savings company. That will bargain in behalf of their customers to obtain the best costs possible for their existing customers. They will examine old billings for errors obtaining for their customers reimbursements as well as tax credits. They can raise the success and overall assessment of their clients organizations.
Solutions supplied can include:
Committed professionals that will translate extremely complicated program guidelines as well as will be offered to answer your questions, including:
Just how does the PPP funding factor right into the ERC?
What are the differences in between the 2020 as well as 2021 programs and also just how does it use to your service?
What are gathering rules for larger, multi-state employers, and how do I analyze multiple states executive orders?
How do part-time, Union, as well as tipped workers impact the quantity of my refunds?
Complete assessment regarding your qualification
Thorough analysis of your claim
Guidance on the claiming process as well as paperwork
Certain program knowledge that a regular CPA or pay-roll cpu could not be well-versed in
Quick as well as smooth end-to-end procedure, from eligibility to declaring and 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/ |
Ready To Start? Its Simple.
1. Whichever firm you pick to work with will determine whether your service qualifies and gets approvel for the ERC.
2. They will certainly analyze your request and compute the optimum quantity you can obtain.
3. Their team overviews you through the asserting procedure, from beginning to finish, including proper paperwork.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program started on March 13th, 2020 and right on September 30, 2021, for qualified businesses.
You can use for reimbursements for 2020 as well as 2021 after December 31st of this year, into 2022 and 2023. And also possibly beyond then as well.
Many businesses have received refunds, and also others, in enhancement to reimbursements, likewise qualified to continue getting ERC in every payroll they refine to December 31, 2021, at close to 30% of their pay-roll cost.
Some services have actually obtained reimbursements from $100,000 to $6 million.
Do we still qualify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, companies can currently get the ERC even if they already got a PPP finance. Note, though, that the ERC will only relate to earnings not used for the PPP.
sustain a 20% reduction in gross invoices .
A federal government authority needed partial or complete closure of your business during 2020 or 2021. This includes your procedures being restricted by business, inability to travel or limitations of team meetings.
- Gross invoice decrease criteria is various for 2020 and 2021, yet is gauged versus the current quarter as compared to 2019 pre-COVID quantities:
- A federal government authority called for complete or partial closure of your organization during 2020 or 2021. This includes your procedures being restricted by business, inability to travel or constraints of team conferences.
- Gross invoice reduction standards is different for 2020 and also 2021, however is measured versus the existing quarter as contrasted to 2019 pre-COVID amounts.
Do we still certify if we remained open throughout the pandemic?
Yes. To certify, your business should satisfy either one of the complying with standards:
- Experienced a decline in gross invoices by 20%, or
- Had to change service operations as a result of federal government orders
Several products are taken into consideration as modifications in organization procedures, including shifts in work roles and the purchase of additional protective devices.