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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 ought to stress 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 wish to inform you what you require to understand so you can go to your CPA and state, "Hey, what about this employee retention credit, why have not you told me about this?" You can be informed and take ownership of your own tax circumstances, of your service's tax circumstance to generate more money circulation in your company and more wealth for yourself.
Assistance supplied can include:
Dedicated experts that will interpret extremely complex program rules and will be offered to address your inquiries, including:
What duration does the program cover?
Irondequoit NY Employee Retention Program
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 Works
This is big, a lot of small company owners don't understand about this, or they've become aware of it, however they don't understand much about it, even many tax experts don't understand the ins and outs of this thing because it's new and a great deal of these changes
that are helpful to company owner happened 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 profitable, far more lucrative, in fact now than it was in 2020, 5x more rewarding at least. So even if you don't own a business, be sure to share this video with company owner you know, this video might actually deserve tens of thousands of dollars for them. And if you are an entrepreneur and after you watch this video you desire to talk with me and a member of my group, who will also 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 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 work 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. Since that's the things your CPA ought to stress 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 wish to inform you what you require to understand so you can go to your CPA and state, "Hey, what about this employee retention credit, why have not you told me about this?" You can be informed and take ownership of your own tax circumstances, of your service's tax circumstance to generate more money circulation in your company and more wealth for yourself.
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About Employee Retention Program
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 want to say that absolutely nothing in this video is to be taken as legal or tax advice, this video is for basic informative functions only, yes, I am a tax and a cpa professional, but I am not your CPA nor your tax expert unless you have engaged my firm. Another disclaimer here, for functions 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 employees for functions of the 2020 credit and five hundred or fewer employees for purposes 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 company owners who may work with a local tax expert who is so neck-deep in income tax return right now since the government extended the tax deadline to May 17 or volume is simply the nature of their business 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 business owners in 2021 and why weren't we talking about it in 2020, it's been around since then, because the CARES Act? Yes, the employee retention credit has been around considering 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.
Generally the employee retention credit had a glow-up 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 organization 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 Program
Factor, the employee retention credit for both 2020 and 2021 is now offered to PPP recipients, however of course you can't double dip. You can't get PPP for the hundred thousand dollars you paid your workers 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 need to select the best covered duration that will get you full PPP forgiveness however likewise optimize your employee retention credit.
Also, for PPP forgiveness, you wish to fill that payroll pail with as many expenses as possible that don't count for employee retention credit purposes. You can't claim the employee retention credit on state unemployment insurance coverage contributions, however state unemployment insurance coverage contributions count towards PPP forgiveness, see? So you 'd wish to dump all your state unemployment insurance contributions on your PPP forgiveness application to leave as much ordinary wages as possible to take the employee retention credit on.
Another thing to note is you can't deduct the earnings you claimed the employee retention credit on, and that makes sense as well, why should the federal government give you a deduction for these salaries that they already provided you a credit for? Alright, sorry for getting a little sidetracked there, I simply love 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 easier to certify for the employee retention credit in 2021.
But in 2021, for a quarter to get approved for the employee retention credit, you just need to show a 20% decrease in gross receipts compared to the very same calendar quarter in 2019. This implies far more companies will qualify. My company, for example, experienced a 26% decline in gross receipts, comparing Q1 2019 to Q1 2021, and it was a comparable story in 2015 too.
So I didn't certify for the 2020 employee retention credit first, since I got very first round of PPP cash and second since my organization didn't suffer that large 50% decline required to certify for the employee retention credit last year.But for 2021, a minimum of for Q1, yeah, my organization qualifies. 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 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. Ramification here is that if you get approved for Q1 2021 based upon Q1 2021's gross receipts, you will also receive Q2 2021 because you certified in the lookback quarter of Q1 2021.
Very same thing for Q2 to Q3 and Q3 to Q4, so generally if you simply certify for Q1 and Q3 2021, you also certify for Q2 and Q4 based on the lookback. Also, even if you didn't have an enough decrease in earnings, you can get approved for the employee retention credit if you were required to totally or partly suspend operations in your organization 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 complete or partial shutdown.
Common example, you own a dining establishment, and your guv signed an executive order specifying that you require to close down indoor dining. That is an example of a partial shutdown. Likewise, not only are more businesses eligible for the employee retention credit thanks to these new laws, making PPP recipients qualified for the employee retention credit though not on the same salaries and making more companies eligible through the 20% decline limit rather than the 50% decrease limit, however the 2021 credit is likewise more profitable than the 2020 credit.
This is because for 2020, the employee retention credit amounted to 50% of all qualified salaries for 2020, the employee retention credit amounted to 50% of all qualified earnings you paid employees in between March 12, 2020, and December 31, 2020, with a limit of $10,000 in earnings for that entire time period. The optimum 2020 credit per worker was $5,000. Okay, however that's nothing compared to the 2021 credit because for 2021, the credit is equal to 70% of certified salaries per worker paid from January 1, 2021 through December 31, 2021, limited to $10,000 in wages per worker ... for that entire time period? No. Per quarter. So for 2021 the percentage is more (70% in 2021 vs. 50% in 2020) and you can take it on approximately $10,000 in incomes per employee 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 qualified all four quarters. That's right, folks, the optimum 2021 employee retention credit is $28,000 per worker. That's huge. That's a blessing to lots of company owner right now. So you see what I suggest now, right, how the employee retention credit has gone from awful duckling in 2020 to lovely swan in 2021, right? And by the way, by the way, certified salaries includes employer-paid medical insurance 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 select the finest covered period that will get you complete PPP forgiveness but likewise maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just 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 much easier to certify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit initially, since I got first round of PPP money and second because my business didn't suffer that big 50% decrease required to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my business certifies. Not only are more services qualified for the employee retention credit thanks to these new laws, making PPP receivers eligible for the employee retention credit though not on the same earnings and making more businesses eligible through the 20% decline limit rather than the 50% decline threshold, however the 2021 credit is likewise more lucrative than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit because for 2021, the credit is equal to 70% of qualified wages per worker paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in earnings per staff member ... for that entire time duration?
Just How to Get going
That will discuss on part of their customers to get the ideal costs possible for their existing clients. They will certainly examine old invoices for mistakes obtaining their customers refunds and tax credits.
Assistance supplied can include:
Dedicated experts that will interpret extremely complex program rules and will be offered to address your inquiries, including:
How does the PPP financing factor right into the ERC?
What are the differences between the 2020 and also 2021 programs and also just how does it apply to your service?
What are gathering policies for larger, multi-state employers, as well as how do I translate numerous states executive orders?
How do part-time, Union, and tipped staff members impact the amount of my reimbursements?
Complete analysis regarding your qualification
Comprehensive evaluation of your situation
Assistance on the asserting process and documents
Details program proficiency that a routine CPA or pay-roll cpu might not be well-versed in
Smooth as well as rapid end-to-end process, from qualification to asserting and also getting refunds
| 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 organization certifies and gets approvel for the ERC.
2. They will certainly examine your case and also compute the maximum amount you can receive.
3. Their team guides you through the asserting procedure, from beginning to finish, including appropriate documents.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program started on March 13th, 2020 as well as right on September 30, 2021, for eligible employers.
You can apply for refunds for 2020 as well as 2021 after December 31st of this year, right into 2022 and 2023. And also potentially beyond after that as well.
Many companies have received reimbursements, and also others, in enhancement to refunds, also qualified to continue obtaining ERC in every pay-roll they process to December 31, 2021, at about 30% of their payroll expense.
Some organizations have actually received reimbursements from $100,000 to $6 million.
Do we still qualify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, services can now get the ERC even if they currently received a PPP financing. Note, however, that the ERC will only apply to earnings not utilized for the PPP.
sustain a 20% decline in gross invoices .
A government authority needed partial or complete shutdown of your business throughout 2020 or 2021. This includes your operations being restricted by business, failure to travel or restrictions of group conferences.
- Gross receipt decrease standards is different for 2020 and 2021, but is gauged against the present quarter as contrasted to 2019 pre-COVID quantities:
- A federal government authority called for partial or full closure of your service during 2020 or 2021. This includes your operations being restricted by commerce, inability to take a trip or constraints of team meetings.
- Gross invoice reduction requirements is different for 2020 and 2021, however is measured versus the existing quarter as compared to 2019 pre-COVID quantities.
Do we still qualify if we continued to be open during the pandemic?
Yes. To qualify, your business should satisfy either one of the complying with standards:
- Experienced a decrease in gross invoices by 20%, or
- Had to transform company procedures due to federal government orders
Several things are taken into consideration as adjustments in company operations, including shifts in task roles as well as the acquisition of added protective equipment.