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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 things your CPA ought to fret about, I am not going to get into the intricacies of that kind here or the Form 941 and all the payroll stuff. In this video I want to tell you what you need to know 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 scenarios, of your organization's tax circumstance to produce more money flow in your organization and more wealth for yourself.
Assistance offered can include:
Dedicated professionals that will certainly interpret very intricate program guidelines and will certainly be available to address your concerns, including:
What period does the program cover?
Jackson Heights NY Employee Retention 2021 Erc Calculation
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 Works
This is huge, a lot of little service owners don't learn about this, or they've heard about it, but they don't know much about it, even many tax professionals don't know the ins and outs of this thing because it's brand-new and a great deal of these modifications
that are useful to organization owners took place in the middle of tax season. In this video I'm going to dig into the employee retention credit, why it's so rewarding now in 2021, more lucrative, far more profitable, in fact now than it was in 2020, 5x more rewarding at least. Even if you do not own an organization, be sure to share this video with organization owners you know, this video could actually be worth 10s of thousands of dollars for them. And if you are a business owner and after you view 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], inform me a little about your service and your ballpark year-over-year earnings, and let's see if we can get some more cash back in your pocket since you can take this credit against your payroll taxes you pay by minimizing your required 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 ought to fret about, I am not going to get into the intricacies of that kind here or the Form 941 and all the payroll stuff. In this video I want to tell you what you need to know 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 scenarios, of your organization's tax circumstance to produce more money flow in your organization and more wealth for yourself.
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About Employee Retention 2021 Erc Calculation
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 into this, I want to say that nothing in this video is to be taken as legal or tax guidance, this video is for basic educational purposes just, yes, I am a CPA and a tax professional, however I am not your CPA nor your tax professional unless you have engaged my firm as such. Another disclaimer here, for purposes of this video I am assuming that if you're enjoying this you are a small company owner, which for employee retention credit purposes indicates one hundred or fewer staff members for purposes of the 2020 credit and five hundred or less workers for functions of the 2021 credit, if you have a business with over five hundred employees I picture you have in-house counsel, in-house CPAs who are on top of this things, however I'm here for you little service owners who may work with a local tax expert who is so neck-deep in tax returns today because the government extended the tax due date to May 17 or volume is simply the nature of their company 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 lucrative for organization owners in 2021 and why weren't we talking about it in 2020, it's been around considering that then, because the CARES Act? Yes, the employee retention credit has actually been around because 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 because of the PPP, the Paycheck Protection Program.
Essentially the employee retention credit had a glow-up in between 2020 and 2021, it went from the nerdy lady with thick glasses and neglected eyebrows and her hair up in 2020 to the belle of the ball for business 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 2021 Erc Calculation
Factor, the employee retention credit for both 2020 and 2021 is now 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 workers and then turn around and declare the employee retention credit on those salaries. The federal 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 incomes that the 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 pick the best covered duration that will get you complete PPP forgiveness however also optimize your employee retention credit.
For PPP forgiveness, you desire to fill up that payroll bucket with as lots of costs as possible that do not count for employee retention credit functions. You can't declare the employee retention credit on state unemployment insurance contributions, however state joblessness insurance coverage contributions count towards PPP forgiveness, see? So you 'd wish to discard all your state joblessness insurance contributions on your PPP forgiveness application to leave as much regular earnings as possible to take the employee retention credit on.
This can get extremely technical extremely quick and it's very situation specific in terms of optimizing PPP vs. ERC and my firm has tools to figure this things out for you, I'm not going to dig into all that here, however just understand that you truly have to do the math 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 salaries you claimed the employee retention credit on, which makes sense too, why should the federal government offer you a reduction for these incomes that they already offered you a credit for? Essentially the credit is tax-effected. Alright, sorry for getting a little sidetracked there, I just love speaking about this things, but let's talk about another reason the employee retention credit is more appealing now than it was last year, and that is that it's easier to get approved for the employee retention credit in 2021. In 2020, for a quarter to get approved for the employee retention credit, you had to reveal a 50% decrease in gross invoices compared to the very same calendar quarter in 2019.
In 2021, for a quarter to qualify for the employee retention credit, you only need to show a 20% reduction in gross receipts compared to the exact same calendar quarter in 2019. This means far more services will qualify. My business, for instance, experienced a 26% decrease in gross invoices, comparing Q1 2019 to Q1 2021, and it was a similar story in 2015 too.
So I didn't receive the 2020 employee retention credit initially, because I got very first round of PPP cash and 2nd due to the fact that my business didn't suffer that big 50% decrease required to get approved for the employee retention credit last year.But for 2021, at least for Q1, yeah, my organization qualifies. For 2021, for any quarter, you can choose to use the lookback quarter, meaning that, for example, even if your Q1 2021 gross receipts aren't at least 20% lower than your Q1 2019 gross invoices, you can compare for functions 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 certify for Q1 2021 based upon Q1 2021's gross invoices, you will likewise certify for Q2 2021 since you qualified in the lookback quarter of Q1 2021.
Exact same thing for Q2 to Q3 and Q3 to Q4, so generally if you just get approved for Q1 and Q3 2021, you likewise certify for Q2 and Q4 based upon the lookback. Even if you didn't have an adequate decrease in revenue, you can certify for the employee retention credit if you were needed to totally or partially suspend operations in your organization 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 during that duration of full or partial shutdown.
Common example, you own a dining establishment, and your governor signed an executive order stating that you need to close down indoor dining. That is an example of a partial shutdown. Not just are more companies qualified for the employee retention credit thanks to these new laws, making PPP receivers qualified for the employee retention credit though not on the very same salaries and making more companies eligible through the 20% decrease limit rather than the 50% decrease threshold, however the 2021 credit is likewise more rewarding than the 2020 credit.
Not bad, but that's absolutely nothing compared to the 2021 credit since for 2021, the credit is equivalent to 70% of qualified wages per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in wages per employee ... for that entire time duration? For 2021 the portion is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in salaries per employee per quarter, so we're talking about a maximum credit of $7,000 per employee per quarter. That's right, folks, the maximum 2021 employee retention credit is $28,000 per employee.
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 full PPP forgiveness however likewise optimize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just love 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 qualify for the 2020 employee retention credit first, due to the fact that I got very first round of PPP money and second because my organization 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 company qualifies. Not only are more businesses qualified for the employee retention credit thanks to these brand-new laws, making PPP receivers qualified for the employee retention credit though not on the very same salaries and making more services eligible through the 20% decline threshold rather than the 50% decline threshold, but the 2021 credit is also more financially rewarding than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit since for 2021, the credit is equal to 70% of qualified wages per employee paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in wages per employee ... for that whole time duration?
How to Get going
The best means is to work with a no-risk, contingency-based expense financial savings firm. That will negotiate in support of their customers to get the very best costs feasible for their existing customers. They will certainly investigate old invoices for errors obtaining for their customers refunds as well as tax credits. They can boost the success as well as overall evaluation of their customers companies.
Assistance offered can include:
Dedicated professionals that will certainly interpret very intricate program guidelines and will certainly be available to address your concerns, including:
How does the PPP financing element into the ERC?
What are the distinctions in between the 2020 and 2021 programs and also how does it put on your organization?
What are aggregation policies for larger, multi-state companies, and also just how do I interpret several states executive orders?
Exactly how do part-time, Union, and tipped employees affect the quantity of my refunds?
Extensive examination concerning your qualification
Thorough analysis of your claim
Support on the asserting process and also documents
Certain program experience that a normal certified public accountant or payroll cpu may not be well-versed in
Smooth and also quick end-to-end procedure, from qualification to asserting and receiving 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/ |
Prepared To Begin? Its Simple.
1. Whichever company you choose to work with will certainly figure out whether your service qualifies and gets approvel for the ERC.
2. They will certainly examine your claim and also calculate the maximum quantity you can obtain.
3. Their group guides you via the asserting process, from starting to end, consisting of correct documentation.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program began on March 13th, 2020 and right on September 30, 2021, for qualified organizations.
You can obtain refunds for 2020 as well as 2021 after December 31st of this year, right into 2022 and 2023. And also possibly beyond after that as well.
Many organizations have received reimbursements, and others, in addition to reimbursements, also qualified to proceed getting ERC in every pay-roll they refine to December 31, 2021, at around 30% of their pay-roll cost.
Some services have actually received reimbursements from $100,000 to $6 million.
Do we still certify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, organizations can now get the ERC also if they already got a PPP lending. Keep in mind, though, that the ERC will only relate to wages not made use of for the PPP.
Do we still certify if we did not incur a 20% decrease in gross invoices .
A federal government authority called for partial or complete shutdown of your service throughout 2020 or 2021. This includes your procedures being limited by business, failure to travel or constraints of team conferences.
- Gross invoice reduction standards is various for 2020 as well as 2021, however is measured against the current quarter as compared to 2019 pre-COVID quantities:
- A government authority needed partial or full shutdown of your service throughout 2020 or 2021. This includes your operations being restricted by commerce, failure to travel or restrictions of group conferences.
- Gross invoice reduction standards is various for 2020 and 2021, but is measured versus the present quarter as contrasted to 2019 pre-COVID quantities.
Do we still certify if we continued to be open throughout the pandemic?
Yes. To qualify, your company needs to fulfill either among the adhering to criteria:
- Experienced a decrease in gross receipts by 20%, or
- Needed to alter organization operations because of federal government orders
Numerous products are taken into consideration as modifications in organization operations, including changes in job duties as well as the acquisition of additional protective equipment.