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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 stuff your CPA should 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 tell you what you require to know so you can go to your CPA and say, "Hey, what about this employee retention credit, why haven't you told me about this?" so you can be informed and take ownership of your own tax scenarios, of your business's tax circumstance to produce more cash flow in your organization and more wealth on your own.
Services provided can include:
Committed professionals that will certainly interpret very complex program guidelines and will be readily available to address your concerns, including:
What period does the program cover?
Levittown 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.
Just how It Functions
This is big, a lot of little business owners do not learn about this, or they've found out about it, but they do not know much about it, even numerous tax professionals don't know the ins and outs of this thing due to the fact that it's brand-new and a great deal of these modifications
that are helpful to entrepreneur 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 lucrative now in 2021, more financially rewarding, far more lucrative, in fact now than it was in 2020, 5x more lucrative at least. So even if you don't own a company, make certain to share this video with company owner you know, this video could literally be worth tens of thousands of dollars for them. And if you are a company owner and after you view 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 profits, and let's see if we can get some more money back in your pocket since you can take this credit versus your payroll taxes you pay by reducing your required work 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. Since that's the stuff your CPA should 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 tell you what you require to know so you can go to your CPA and say, "Hey, what about this employee retention credit, why haven't you told me about this?" so you can be informed and take ownership of your own tax scenarios, of your business's tax circumstance to produce more cash flow in your organization and more wealth on your own.
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About Employee Retention Program
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, prior to I enter into this, I desire to say that absolutely nothing in this video is to be taken as legal or tax recommendations, this video is for general educational functions only, yes, I am a CPA and a tax expert, however I am not your CPA nor your tax professional unless you have engaged my company as such. 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 employees for purposes of the 2020 credit and 5 hundred or fewer employees for purposes of the 2021 credit, if you have a business with over 5 hundred staff members 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 may deal with a local tax specialist who is so neck-deep in income tax return today because the federal government extended the tax deadline to May 17 or volume is just the nature of their service that your tax expert 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 since then, considering that 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, but 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.
Basically the employee retention credit had a glow-up between 2020 and 2021, it went from the unpopular woman with thick glasses and unkempt 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 Program
Reason, the employee retention credit for both 2020 and 2021 is now 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 after that reverse and declare the employee retention credit on those salaries as well. The federal government doesn't look too fondly on paying your payroll for you through the PPP and then you declaring a credit versus the taxes you pay the government on those wages that the federal 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 need to select the finest covered period that will get you full PPP forgiveness however likewise optimize your employee retention credit.
For PPP forgiveness, you desire to fill up that payroll pail with as numerous costs as possible that don't count for employee retention credit functions. You can't declare the employee retention credit on state unemployment insurance contributions, however state unemployment insurance coverage contributions count towards PPP forgiveness, see? So you 'd wish 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.
So this can get very technical extremely quickly and it's extremely circumstance particular 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, but feel in one's bones that you actually need to do the math when doing your PPP forgiveness to ensure you're not leaving anything on the table in regards to the employee retention credit. Another thing to note is you can't deduct the incomes you declared the employee retention credit on, which makes good sense as well, why should the government offer you a reduction for these salaries that they already provided you a credit for? So essentially the credit is tax-effected. Alright, sorry for getting a little sidetracked there, I just love speaking about this stuff, however let's speak about another reason that the employee retention credit is more attractive now than it was last year, which is that it's simpler to qualify for the employee retention credit in 2021. In 2020, for a quarter to certify for the employee retention credit, you needed to show a 50% reduction in gross receipts compared to the very same calendar quarter in 2019.
In 2021, for a quarter to certify for the employee retention credit, you just need to reveal a 20% reduction in gross invoices compared to the same calendar quarter in 2019. This indicates far more businesses will certify. My service, for example, 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 qualify for the 2020 employee retention credit first, since I got very first round of PPP cash and 2nd since my organization didn't suffer that large 50% decline required to qualify 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, indicating 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 purposes of determining 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 on Q1 2021's gross invoices, you will also get approved for Q2 2021 since you qualified in the lookback quarter of Q1 2021.
Same thing for Q2 to Q3 and Q3 to Q4, so essentially if you just get approved for Q1 and Q3 2021, you also get approved for Q2 and Q4 based on the lookback. Likewise, even if you didn't have an enough 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 eligible for the employee retention credit throughout that duration of partial or complete shutdown.
Common example, you own a restaurant, and your guv 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 services qualified for the employee retention credit thanks to these new laws, making PPP recipients qualified for the employee retention credit though not on the same incomes and making more businesses eligible through the 20% decline threshold rather than the 50% decline limit, but 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 staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in earnings per staff member ... for that entire time period? For 2021 the percentage is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in earnings 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 maximum 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 need 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 enjoy talking about this things, 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 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 very first round of PPP money and second due to the fact that 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 company certifies. Not just 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 very same earnings and making more organizations eligible through the 20% decline threshold rather than the 50% decrease threshold, but the 2021 credit is also more rewarding than the 2020 credit.
Not bad, but that's absolutely nothing compared to the 2021 credit because for 2021, the credit is equal 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 whole time period?
Just How to Start
The very best method is to deal with a no-risk, contingency-based cost financial savings company. That will bargain in behalf of their clients to obtain the most effective prices possible for their existing clients. They will examine old invoices for errors obtaining for their clients refunds as well as tax credits. They can increase the earnings and general assessment of their customers organizations.
Services provided can include:
Committed professionals that will certainly interpret very complex program guidelines and will be readily available to address your concerns, including:
Exactly how does the PPP finance element into the ERC?
What are the distinctions in between the 2020 and also 2021 programs and just how does it relate to your business?
What are aggregation guidelines for larger, multi-state employers, and just how do I interpret several states executive orders?
How do part-time, Union, and tipped staff members influence the amount of my reimbursements?
Detailed examination regarding your eligibility
Comprehensive analysis of your case
Guidance on the declaring procedure and paperwork
Details program knowledge that a normal CPA or payroll cpu may not be well-versed in
Fast as well as smooth end-to-end process, from eligibility to asserting and also receiving reimbursements
| 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/ |
Ready To Get Begun? Its Simple.
1. Whichever firm you pick to work with will certainly determine whether your business certifies for the ERC.
2. They will certainly evaluate your claim as well as calculate the optimum amount you can receive.
3. Their group guides you with the declaring process, from starting to finish, consisting of appropriate paperwork.
Frequently Asked Questions (FAQs)
What period does the program cover?
The program started on March 13th, 2020 and also right on September 30, 2021, for eligible businesses.
You can request reimbursements for 2020 and also 2021 after December 31st of this year, into 2022 and 2023. As well as possibly beyond after that as well.
Many organizations have received reimbursements, and also others, in enhancement to reimbursements, likewise qualified to continue obtaining ERC in every pay-roll they process through December 31, 2021, at around 30% of their payroll expense.
Some businesses have gotten 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 receive the ERC also if they currently obtained a PPP lending. Keep in mind, however, 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 full or partial shutdown of your organization throughout 2020 or 2021. This includes your procedures being restricted by business, lack of ability to take a trip or restrictions of team conferences.
- Gross invoice reduction criteria is various for 2020 as well as 2021, yet is measured versus the current quarter as compared to 2019 pre-COVID amounts:
- A federal government authority needed partial or full closure of your service throughout 2020 or 2021. This includes your operations being limited by business, inability to take a trip or restrictions of group conferences.
- Gross invoice reduction criteria is different for 2020 and 2021, however is gauged versus the current quarter as contrasted to 2019 pre-COVID quantities.
Do we still qualify if we stayed open throughout the pandemic?
Yes. To qualify, your service should fulfill either one of the adhering to criteria:
- Experienced a decline in gross receipts by 20%, or
- Had to change organization procedures because of federal government orders
Several items are considered as modifications in service operations, including changes in job functions and also the purchase of additional safety equipment.