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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.
I am not going to get into the complexities of that kind here or the Form 941 and all the payroll things since that's the stuff your CPA must stress over. In this video I desire 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 have not you informed me about this?" You can be informed and take ownership of your own tax scenarios, of your company's tax situation to create more money circulation in your business and more wealth for yourself.
Assistance provided can include:
Dedicated experts that will analyze highly intricate program regulations and also will be readily available to answer your questions, including:
What period does the program cover?
Jackson Heights NY Employee Retention Credit 2021
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 big, a great deal of small company owners don't understand about this, or they've found out about it, but they don't understand much about it, even numerous tax specialists don't understand the ins and outs of this thing because it's new and a great deal of these modifications
that are advantageous to entrepreneur occurred 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 rewarding, far more financially rewarding, in truth now than it was in 2020, 5x more profitable at least. Even if you don't own a company, be sure to share this video with service owners you know, this video could actually be worth tens of thousands of dollars for them. And if you are an entrepreneur and after you enjoy this video you wish 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 money back in your pocket due to the fact that you can take this credit versus your payroll taxes you pay by minimizing your required 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. I am not going to get into the complexities of that kind here or the Form 941 and all the payroll things since that's the stuff your CPA must stress over. In this video I desire 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 have not you informed me about this?" You can be informed and take ownership of your own tax scenarios, of your company's tax situation to create more money circulation in your business and more wealth for yourself.
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About Employee Retention Credit 2021
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 say that nothing in this video is to be taken as legal or tax recommendations, this video is for basic informative functions just, yes, I am a tax and a certified public accountant professional, however I am not your CPA nor your tax expert unless you have engaged my firm. 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 implies one hundred or fewer staff members for purposes of the 2020 credit and five hundred or less staff members for purposes of the 2021 credit, if you have a company with over 5 hundred workers I picture you have in-house counsel, in-house CPAs who are on top of this stuff, however I'm here for you small company owners who might deal with a regional tax specialist who is so neck-deep in tax returns today because the government extended the tax due date to May 17 or volume is just the nature of their company that your tax professional hasn't had the time to dig into the weeds here like I have.
Employee retention credit, why is it so lucrative for business owners in 2021 and why weren't we talking about it in 2020, it's been around because then, considering that the CARES Act? Yes, the employee retention credit has been around because the CARES Act that was passed over a year ago in March 2020, but the employee retention credit didn't get much love last year in 2020 since of the PPP, the Paycheck Protection Program.
The stimulus bill 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 appealing. So generally the employee retention credit had a glow-up between 2020 and 2021, it went from the unpopular girl with unkempt eyebrows and thick glasses and her hair up in 2020 to the belle of the ball for business owners in 2021. Why? Why is the employee retention credit more attractive now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act? I'll inform you why, a couple of factors.
Why Employee Retention Credit 2021
Reason, 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 earnings. If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you need to choose the 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 numerous costs as possible that do not count for employee retention credit functions. For instance, you can't claim the employee retention credit on state unemployment insurance contributions, but state joblessness insurance contributions count toward PPP forgiveness, see? You 'd desire to dispose all your state joblessness insurance coverage contributions on your PPP forgiveness application to leave as much normal earnings 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 government give you a reduction for these salaries that they currently gave you a credit for? Alright, sorry for getting a little sidetracked there, I just enjoy talking about this things, 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 qualify for the employee retention credit in 2021.
In 2021, for a quarter to qualify for the employee retention credit, you just need to show a 20% decrease in gross invoices compared to the same calendar quarter in 2019. So this suggests far more businesses will qualify. My organization, for instance, experienced a 26% decline 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, since I got first round of PPP money and 2nd because my service didn't suffer that large 50% decrease required to certify 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 choose to use the lookback quarter, implying 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 figuring out 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 on Q1 2021's gross invoices, you will likewise get approved 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 basically if you simply receive 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 certify for the employee retention credit if you were required to totally or partially suspend operations in your service 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.
Typical example, you own a restaurant, and your governor signed an executive order specifying that you require to shut 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 brand-new laws, making PPP receivers qualified for the employee retention credit though not on the same incomes and making more businesses eligible through the 20% decrease limit rather than the 50% decline limit, but the 2021 credit is likewise more rewarding than the 2020 credit.
This is since for 2020, the employee retention credit amounted to 50% of all qualified earnings for 2020, the employee retention credit was equal to 50% of all certified incomes you paid employees between March 12, 2020, and December 31, 2020, with a limit of $10,000 in incomes for that entire period. So the optimum 2020 credit per staff member was $5,000. Not bad, however that's absolutely 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 earnings per staff member ... for that entire period? No. Per quarter. So for 2021 the portion is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in wages per staff member per quarter, so we're speaking about an optimum credit of $7,000 per employee per quarter. $7,000 times four is $28,000 if you're qualified all four quarters. That's right, folks, the maximum 2021 employee retention credit is $28,000 per worker. That's big. That's a blessing to numerous entrepreneur right now. You see what I suggest now, right, how the employee retention credit has gone from unsightly duckling in 2020 to lovely swan in 2021? And by the method, by the way, qualified incomes consists of employer-paid health 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 choose the finest covered duration that will get you full PPP forgiveness however also maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I simply like talking about this stuff, but 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. I didn't qualify for the 2020 employee retention credit initially, due to the fact that I got first round of PPP money and second due to the fact that my company 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 service certifies. Not just are more businesses qualified for the employee retention credit thanks to these 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% decline limit, however the 2021 credit is likewise more financially rewarding than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit since for 2021, the credit is equivalent to 70% of certified earnings per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in wages per employee ... for that entire time duration?
How to Start
That will bargain on behalf of their customers to get the finest costs possible for their existing customers. They will certainly examine old invoices for mistakes getting their clients refunds and credits.
Assistance provided can include:
Dedicated experts that will analyze highly intricate program regulations and also will be readily available to answer your questions, including:
Just how does the PPP funding variable right into the ERC?
What are the differences between the 2020 and also 2021 programs as well as just how does it put on your service?
What are aggregation regulations for bigger, multi-state companies, and exactly how do I analyze multiple states executive orders?
Exactly how do part-time, Union, and tipped employees affect the quantity of my reimbursements?
Complete evaluation regarding your eligibility
Extensive analysis of your situation
Guidance on the declaring process as well as documents
Certain program knowledge that a routine CPA or payroll cpu might not be well-versed in
Fast and smooth end-to-end process, from qualification to claiming and receiving refunds
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| NYC Business https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program |
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| ERTC Filing https://info.ertcfiling.com/employee-retention-tax-credit-new-york-11368/ |
All Set To Get Started? Its Simple.
1. Whichever company you select to work with will figure out whether your service certifies for the ERC.
2. They will evaluate your case and compute the optimum amount you can receive.
3. Their team overviews you via the claiming process, from beginning to finish, including proper paperwork.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program started on March 13th, 2020 and right on September 30, 2021, for eligible employers.
You can obtain reimbursements for 2020 as well as 2021 after December 31st of this year, right into 2022 and also 2023. As well as potentially past after that too.
Many organizations have received refunds, as well as others, along with refunds, additionally certified to continue obtaining ERC in every pay-roll they refine to December 31, 2021, at around 30% of their pay-roll cost.
Some organizations have gotten refunds 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 qualify for the ERC even if they already received a PPP lending. Note, though, that the ERC will just put on incomes not used for the PPP.
maintain a 20% reduction in gross invoices .
A federal government authority called for full or partial shutdown of your company throughout 2020 or 2021. This includes your procedures being restricted by business, failure to take a trip or limitations of group meetings.
- Gross receipt reduction requirements is various for 2020 and also 2021, yet is determined versus the existing quarter as contrasted to 2019 pre-COVID quantities:
- A government authority needed partial or full closure of your organization throughout 2020 or 2021. This includes your operations being limited by commerce, inability to take a trip or constraints of team conferences.
- Gross invoice decrease criteria is different for 2020 and also 2021, yet is determined versus the current quarter as contrasted to 2019 pre-COVID quantities.
Do we still certify if we remained open during the pandemic?
Yes. To certify, your company has to fulfill either among the following requirements:
- Experienced a decline in gross receipts by 20%, or
- Needed to change organization procedures as a result of government orders
Lots of things are taken into consideration as changes in company procedures, consisting of changes in task duties as well as the purchase of added protective tools.