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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 intricacies of that form here or the Form 941 and all the payroll stuff because that's the things your CPA need to stress over. In this video I wish to inform you what you require to know so you can go to your CPA and state, "Hey, what about this employee retention credit, why have not you told me about this?" so you can be informed and take ownership of your own tax circumstances, of your business's tax situation to produce more capital in your company and more wealth for yourself.
Services offered can include:
Committed professionals that will certainly translate extremely intricate program policies and also will be readily available to answer your questions, including:
What duration does the program cover?
Jackson Heights NY Employee Retention Ertc
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 little service owners do not understand about this, or they've become aware of it, however they do not know much about it, even numerous tax experts do not know the ins and outs of this thing due to the fact that it's new and a great deal of these changes
that are helpful 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 financially rewarding now in 2021, more financially rewarding, far more lucrative, in truth now than it was in 2020, 5x more rewarding at least. Even if you do not own a service, be sure to share this video with company owners you know, this video could literally be worth tens of thousands of dollars for them. And if you are an organization owner and after you watch this video you wish to talk with me and a member of my team, who will also be either a CPA like myself or an EA, shoot me an e-mail, [email protected], inform me a little about your organization and your ballpark year-over-year profits, and let's see if we can get some more refund in your pocket due to the fact that you can take this credit versus your payroll taxes you pay by decreasing your needed employment tax deposits or you can ask for an advance payment of the credit utilizing IRS Form 7200, Advance Payment of Employer Credits Due to COVID-19. I am not going to get into the intricacies of that form here or the Form 941 and all the payroll stuff because that's the things your CPA need to stress over. In this video I wish to inform you what you require to know so you can go to your CPA and state, "Hey, what about this employee retention credit, why have not you told me about this?" so you can be informed and take ownership of your own tax circumstances, of your business's tax situation to produce more capital in your company and more wealth for yourself.
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About Employee Retention Ertc
Alright, now let's dig into this and let's discuss the employee retention credit or the ERC as some folks like to call it, prior to I get into this, I wish to state that nothing in this video is to be taken as legal or tax suggestions, this video is for basic informative purposes just, yes, I am a CPA and a tax expert, however I am not your CPA nor your tax expert unless you have actually engaged my company as such. Another disclaimer here, for purposes of this video I am presuming that if you're seeing this you are a small company owner, which for employee retention credit functions means one hundred or fewer staff members for functions 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 imagine you have in-house counsel, in-house CPAs who are on top of this stuff, but I'm here for you little organization owners who may deal with a regional tax expert who is so neck-deep in income tax return today since the government extended the tax due date to May 17 or volume is simply the nature of their organization 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 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 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 due to the fact that of the PPP, the Paycheck Protection Program.
But the stimulus bill passed in December, the Consolidated Appropriations Act, along with the American Rescue Plan Act, passed in February 2021, made changes to the ERC making it a lot more attractive. Generally the employee retention credit had a glow-up between 2020 and 2021, it went from the nerdy girl with thick glasses and neglected eyebrows 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 appealing now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act? I'll inform you why, a few factors.
Why Employee Retention Ertc
Reason, the employee retention credit for both 2020 and 2021 is now readily available to PPP receivers, 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 reverse and claim the employee retention credit on those incomes as well. The federal government doesn't look too fondly on paying your payroll for you through the PPP and after that you claiming a credit against the taxes you pay the government on those incomes that the federal government paid for you. That makes sense. Now, there's some planning 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 finest covered period that will get you complete PPP forgiveness but likewise optimize your employee retention credit.
Also, for PPP forgiveness, you wish to fill that payroll container with as lots of costs as possible that don't count for employee retention credit functions. For instance, you can't claim the employee retention credit on state joblessness insurance coverage contributions, however state joblessness insurance contributions count towards PPP forgiveness, see? You 'd want to discard all your state unemployment insurance coverage contributions on your PPP forgiveness application to leave as much ordinary earnings as possible to take the employee retention credit on.
This can get very technical really quickly and it's extremely circumstance 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 know that you actually 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 deduct the incomes you declared the employee retention credit on, and that makes sense also, why should the federal government provide you a deduction for these earnings that they already 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, but let's discuss another reason the employee retention credit is more attractive now than it was last year, which is that it's easier to certify for the employee retention credit in 2021. In 2020, for a quarter to qualify for the employee retention credit, you needed to reveal a 50% decline in gross invoices compared to the same calendar quarter in 2019.
In 2021, for a quarter to certify for the employee retention credit, you just require to show a 20% decline in gross receipts compared to the exact same calendar quarter in 2019. So this implies even more companies will certify. My company, for example, experienced a 26% decline in gross receipts, comparing Q1 2019 to Q1 2021, and it was a comparable story last year too.
So I didn't qualify for the 2020 employee retention credit first, because I got preliminary of PPP cash and second because my company didn't suffer that big 50% decline needed to receive the employee retention credit last year.But for 2021, at least for Q1, yeah, my company 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 figuring out eligibility for the employee retention credit for Q1 2021, you can compare Q4 2020 to Q4 2019. Implication here is that if you receive Q1 2021 based upon Q1 2021's gross invoices, you will likewise get approved for Q2 2021 because you certified in the lookback quarter of Q1 2021.
Same thing for Q2 to Q3 and Q3 to Q4, so generally if you simply get approved for Q1 and Q3 2021, you likewise receive Q2 and Q4 based upon the lookback. Even if you didn't have an adequate decrease in revenue, you can qualify for the employee retention credit if you were required to fully 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 during that period of full or partial shutdown.
Common example, you own a dining establishment, and your governor signed an executive order specifying that you require to shut down indoor dining. That is an example of a partial shutdown. Likewise, not just are more services qualified for the employee retention credit thanks to these brand-new laws, making PPP recipients qualified for the employee retention credit though not on the very same salaries and making more businesses eligible through the 20% decrease threshold instead of the 50% decline limit, however the 2021 credit is likewise more profitable than the 2020 credit.
This is because for 2020, the employee retention credit was equivalent to 50% of all qualified salaries for 2020, the employee retention credit amounted to 50% of all certified incomes you paid staff members between March 12, 2020, and December 31, 2020, with a limitation of $10,000 in incomes for that entire period. The maximum 2020 credit per worker was $5,000. Okay, but that's absolutely nothing compared to the 2021 credit because for 2021, the credit amounts to 70% of qualified wages per employee paid from January 1, 2021 through December 31, 2021, limited to $10,000 in incomes per staff member ... for that entire 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 salaries per staff member per quarter, so we're talking about an optimum credit of $7,000 per staff member per quarter. $7,000 times 4 is $28,000 if you're eligible all 4 quarters. That's right, folks, the maximum 2021 employee retention credit is $28,000 per worker. That's big. That's a godsend to many entrepreneur today. You see what I indicate now, right, how the employee retention credit has gone from unsightly duckling in 2020 to stunning swan in 2021? And by the method, by the method, qualified earnings consists of employer-paid medical insurance 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 choose the best covered duration that will get you full PPP forgiveness however also optimize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just enjoy 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 much easier to qualify for the employee retention credit in 2021. I didn't qualify for the 2020 employee retention credit first, because I got first round of PPP money and second because 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 company certifies. Not just are more companies qualified for the employee retention credit thanks to these brand-new laws, making PPP recipients qualified for the employee retention credit though not on the very same wages and making more companies eligible through the 20% decrease limit rather than the 50% decline limit, but the 2021 credit is also more financially rewarding than the 2020 credit.
Not bad, however that's nothing compared to the 2021 credit due to the fact that for 2021, the credit is equal to 70% of qualified earnings per staff member paid from January 1, 2021 through December 31, 2021, limited to $10,000 in salaries per staff member ... for that entire time period?
Just How to Get going
The very best way is to deal with a no-risk, contingency-based price savings business. That will certainly discuss on behalf of their customers to get the most effective rates possible for their existing customers. They will certainly investigate old billings for mistakes obtaining for their customers refunds and also credits. They can enhance the productivity and also overall evaluation of their clients companies.
Services offered can include:
Committed professionals that will certainly translate extremely intricate program policies and also will be readily available to answer your questions, including:
How does the PPP loan element right into the ERC?
What are the distinctions in between the 2020 and 2021 programs as well as just how does it relate to your service?
What are aggregation guidelines for larger, multi-state companies, and how do I analyze multiple states executive orders?
Just how do part-time, Union, as well as tipped employees influence the amount of my reimbursements?
Comprehensive evaluation concerning your eligibility
Extensive analysis of your claim
Assistance on the claiming procedure as well as paperwork
Details program knowledge that a routine certified public accountant or payroll processor could not be well-versed in
Smooth and also quick end-to-end procedure, from qualification to claiming and also obtaining refunds
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| 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 firm you pick to work with will figure out whether your organization qualifies and gets approvel for the ERC.
2. They will certainly evaluate your case and also calculate the optimum quantity you can get.
3. Their team overviews you through the claiming process, from starting to finish, including appropriate documents.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program began on March 13th, 2020 and also finishes on September 30, 2021, for eligible businesses.
You can get refunds for 2020 as well as 2021 after December 31st of this year, right into 2022 and also 2023. And potentially past after that too.
Many services have received refunds, and also others, in enhancement to reimbursements, also qualified to continue getting ERC in every pay-roll they process to December 31, 2021, at close to 30% of their pay-roll expense.
Some organizations have gotten reimbursements from $100,000 to $6 million.
Do we still qualify if we currently took the PPP?
Yes. Under the Consolidated Appropriations Act, services can currently certify for the ERC even if they currently received a PPP funding. Note, however, that the ERC will only relate to salaries not utilized for the PPP.
Do we still qualify if we did not) sustain a 20% decrease in gross receipts .
A federal government authority needed partial or full closure of your business throughout 2020 or 2021. This includes your procedures being restricted by commerce, lack of ability to take a trip or restrictions of group meetings.
- Gross receipt decrease standards is various for 2020 as well as 2021, however is determined versus the existing quarter as compared to 2019 pre-COVID quantities:
- A government authority needed complete or partial shutdown of your service throughout 2020 or 2021. This includes your procedures being restricted by commerce, lack of ability to take a trip or limitations of group meetings.
- Gross receipt reduction standards is different for 2020 and 2021, but is measured versus the current quarter as compared to 2019 pre-COVID amounts.
Do we still qualify if we continued to be open throughout the pandemic?
Yes. To qualify, your service has to fulfill either among the adhering to standards:
- Experienced a decline in gross receipts by 20%, or
- Had to change business operations as a result of federal government orders
Lots of items are taken into consideration as adjustments in service operations, consisting of changes in job functions as well as the purchase of added protective tools.