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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 kind here or the Form 941 and all the payroll things because that's the stuff your CPA must fret about. In this video I want to tell 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 notified and take ownership of your own tax situations, of your service's tax circumstance to create more money circulation in your service and more wealth on your own.
Services provided can include:
Dedicated specialists that will certainly analyze extremely intricate program policies and also will certainly be offered to answer your inquiries, including:
What period does the program cover?
Jackson Heights NY Employee Retention Tax 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.
Just how It Functions
This is huge, a lot of small company owners don't understand about this, or they've heard about it, but they don't understand much about it, even numerous tax experts do not know the ins and outs of this thing since it's brand-new and a lot of these changes
that are beneficial to company owner occurred in the middle of tax season. So in this video I'm going to go into the employee retention credit, why it's so lucrative now in 2021, more lucrative, even more lucrative, in reality now than it was in 2020, 5x more profitable at least. So even if you don't own a service, be sure to share this video with company owner you understand, this video might literally be worth 10s of countless dollars for them. And if you are an entrepreneur and after you view this video you wish to talk with me and a member of my group, who will likewise be either a CPA like myself or an EA, shoot me an email, [email protected], tell me a little about your business and your ballpark year-over-year income, and let's see if we can get some more money 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 ask for 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 intricacies of that kind here or the Form 941 and all the payroll things because that's the stuff your CPA must fret about. In this video I want to tell 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 notified and take ownership of your own tax situations, of your service's tax circumstance to create more money circulation in your service and more wealth on your own.
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About Employee Retention Tax Credit 2020
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, before I enter this, I wish to state that absolutely nothing in this video is to be taken as legal or tax advice, this video is for basic informational functions only, yes, I am a CPA and a tax expert, but I am not your CPA nor your tax professional unless you have actually engaged my company as such. Another disclaimer here, for functions of this video I am assuming that if you're enjoying this you are a small company owner, which for employee retention credit functions implies one hundred or fewer workers for functions of the 2020 credit and 5 hundred or fewer employees for functions of the 2021 credit, if you have a company with over 5 hundred employees I imagine you have in-house counsel, in-house CPAs who are on top of this stuff, but I'm here for you small business owners who might work with a local tax specialist who is so neck-deep in income tax return today since the federal government extended the tax due date to May 17 or volume is simply the nature of their business 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 rewarding for organization owners in 2021 and why weren't we talking about it in 2020, it's been around because then, because the CARES Act? Why is it getting all this buzz now that it wasn't in 2015? Well, let's back it up. Yes, the employee retention credit has been around given that the CARES Act that was passed over a year ago in March 2020, but the employee retention credit didn't get much love in 2015 in 2020 due to the fact that of the PPP, the Paycheck Protection Program. Originally, in 2020, if you got a PPP loan as an employer, you were not qualified for the employee retention credit.
Generally the employee retention credit had a glow-up 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 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 Tax Credit 2020
Reason, the employee retention credit for both 2020 and 2021 is now readily available to PPP recipients, but 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. The government doesn't look too fondly on paying your payroll for you through the PPP and then you declaring a credit against the taxes you pay the federal government on those salaries that the government paid 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 select the finest covered period that will get you complete PPP forgiveness however likewise optimize your employee retention credit.
Also, for PPP forgiveness, you want to fill that payroll container with as numerous expenses as possible that don't count for employee retention credit functions. 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 dump all your state unemployment insurance contributions on your PPP forgiveness application to leave as much common incomes as possible to take the employee retention credit on.
Another thing to note is you can't subtract the incomes you declared the employee retention credit on, and that makes sense as well, why should the government give you a deduction for these incomes that they currently provided you a credit for? Alright, sorry for getting a little sidetracked there, I just enjoy talking about this things, however let's talk about another factor why the employee retention credit is more attractive now than it was last year, and that is that it's much easier to qualify for the employee retention credit in 2021.
In 2021, for a quarter to qualify for the employee retention credit, you just require to reveal a 20% decrease in gross receipts compared to the same calendar quarter in 2019. This suggests far more companies will qualify. My organization, for instance, experienced a 26% decrease in gross invoices, comparing Q1 2019 to Q1 2021, and it was a similar story in 2015 too.
I didn't qualify for the 2020 employee retention credit initially, due to the fact that I got very first round of PPP money and second because my company didn't suffer that big 50% decline needed to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my organization certifies. For 2021, for any quarter, you can choose to utilize the lookback quarter, suggesting that, for example, even if your Q1 2021 gross receipts aren't at least 20% lower than your Q1 2019 gross receipts, 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 get approved for Q1 2021 based upon Q1 2021's gross receipts, you will also get approved for Q2 2021 considering that you qualified in the lookback quarter of Q1 2021.
Very same thing for Q2 to Q3 and Q3 to Q4, so essentially if you just get approved for Q1 and Q3 2021, you also receive Q2 and Q4 based on the lookback. Likewise, even if you didn't have a sufficient decline in revenue, you can qualify for the employee retention credit if you were required to fully or partially suspend operations in your business during 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 full or partial shutdown.
Typical example, you own a restaurant, and your governor signed an executive order mentioning that you need 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 eligible for the employee retention credit though not on the very same wages and making more services eligible through the 20% decline threshold rather than the 50% decline threshold, however the 2021 credit is also more lucrative 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 equivalent to 70% of qualified earnings per employee paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in incomes per employee ... for that whole time duration? For 2021 the percentage is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in wages per worker per quarter, so we're talking about an optimum credit of $7,000 per staff member per quarter. That's right, folks, the optimum 2021 employee retention credit is $28,000 per worker.
If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you require to choose the best covered period 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, however 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 first, due to the fact that I got first round of PPP cash and second since my company didn't suffer that big 50% decrease needed to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my organization certifies. Not only are more companies 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 exact same wages and making more services eligible through the 20% decrease threshold rather than the 50% decline threshold, however the 2021 credit is likewise more rewarding 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 certified incomes per worker paid from January 1, 2021 through December 31, 2021, limited to $10,000 in earnings per staff member ... for that whole time period?
Just How to Start
The best way is to collaborate with a no-risk, contingency-based price savings business. That will bargain in behalf of their clients to get the most effective rates possible for their existing clients. They will investigate old invoices for mistakes obtaining for their customers reimbursements and tax credits. They can boost the productivity and total appraisal of their customers companies.
Services provided can include:
Dedicated specialists that will certainly analyze extremely intricate program policies and also will certainly be offered to answer your inquiries, including:
How does the PPP funding variable right into the ERC?
What are the distinctions in between the 2020 as well as 2021 programs and just how does it relate to your company?
What are gathering regulations for bigger, multi-state employers, and also how do I translate numerous states executive orders?
Just how do part-time, Union, and also tipped workers influence the quantity of my reimbursements?
Comprehensive evaluation concerning your eligibility
Detailed evaluation of your situation
Guidance on the asserting process and paperwork
Particular program expertise that a regular CPA or payroll processor could not be well-versed in
Quick and also smooth end-to-end procedure, from eligibility to declaring as well as obtaining refunds
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| ERTC Filing https://info.ertcfiling.com/employee-retention-tax-credit-new-york-11368/ |
Prepared To Begin? Its Simple.
1. Whichever business you pick to work with will certainly determine whether your business certifies for the ERC.
2. They will assess your case as well as calculate the optimum amount you can get.
3. Their group guides you via the claiming procedure, from starting to end, consisting of proper documents.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program started on March 13th, 2020 and also finishes on September 30, 2021, for qualified companies.
You can request refunds for 2020 and 2021 after December 31st of this year, right into 2022 and 2023. And also potentially past then too.
Many companies have received reimbursements, and others, in enhancement to reimbursements, likewise qualified to continue getting ERC in every payroll they process through December 31, 2021, at close to 30% of their pay-roll cost.
Some organizations have 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 currently get approved for the ERC also if they currently got a PPP car loan. Note, though, that the ERC will just relate to earnings not utilized for the PPP.
maintain a 20% decrease in gross receipts .
A government authority needed partial or complete closure of your organization during 2020 or 2021. This includes your procedures being limited by commerce, inability to travel or limitations of group conferences.
- Gross invoice reduction standards is various for 2020 and 2021, but is measured versus the current quarter as contrasted to 2019 pre-COVID quantities:
- A government authority required partial or full closure of your company during 2020 or 2021. This includes your operations being restricted by commerce, inability to travel or limitations of group conferences.
- Gross invoice decrease standards is various for 2020 and also 2021, however is determined versus the present quarter as contrasted to 2019 pre-COVID amounts.
Do we still qualify if we remained open during the pandemic?
Yes. To certify, your service needs to meet either one of the complying with criteria:
- Experienced a decrease in gross invoices by 20%, or
- Needed to alter organization procedures due to federal government orders
Several items are taken into consideration as modifications in company operations, consisting of shifts in job roles as well as the purchase of added protective tools.