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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 stuff your CPA must stress about, I am not going to get into the intricacies of that form here or the Form 941 and all the payroll stuff. In this video I want to tell you what you require to understand so you can go to your CPA and say, "Hey, what about this employee retention credit, why haven't you told me about this?" You can be notified and take ownership of your own tax scenarios, of your company's tax circumstance to produce more money flow in your business and more wealth for yourself.
Services provided can include:
Devoted professionals that will interpret very intricate program guidelines and also will be readily available to answer your questions, including:
What duration does the program cover?
Levittown NY Employee Retention Tax Credit And Ppp
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.
Exactly How It Functions
This is big, a lot of small organization owners do not understand about this, or they've found out about it, but they do not understand much about it, even many tax professionals don't understand the ins and outs of this thing since it's new and a lot of these modifications
that are helpful to business owners took place in the middle of tax season. So in this video I'm going to go into the employee retention credit, why it's so profitable now in 2021, more lucrative, far more lucrative, in reality now than it was in 2020, 5x more rewarding a minimum of. So even if you do not own a service, make sure to share this video with entrepreneur you understand, this video might literally deserve 10s 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 likewise be either a CPA like myself or an EA, shoot me an email, [email protected], inform me a little about your business and your ballpark year-over-year revenue, and let's see if we can get some more cash back in your pocket since you can take this credit versus your payroll taxes you pay by lowering your needed 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. Because that's the stuff your CPA must stress about, I am not going to get into the intricacies of that form here or the Form 941 and all the payroll stuff. In this video I want to tell you what you require to understand so you can go to your CPA and say, "Hey, what about this employee retention credit, why haven't you told me about this?" You can be notified and take ownership of your own tax scenarios, of your company's tax circumstance to produce more money flow in your business and more wealth for yourself.
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About Employee Retention Tax Credit And Ppp
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 say that absolutely nothing in this video is to be taken as legal or tax advice, this video is for basic informational purposes only, yes, I am a CPA and a tax professional, but I am not your CPA nor your tax expert unless you have engaged my company as such. Another disclaimer here, for purposes of this video I am assuming that if you're viewing this you are a small company owner, which for employee retention credit purposes means one hundred or fewer staff members for purposes of the 2020 credit and five hundred or fewer employees for functions of the 2021 credit, if you have a business with over five hundred staff members I envision 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 local tax expert who is so neck-deep in tax returns right now due to the fact that the government extended the tax deadline to May 17 or volume is simply the nature of their company that your tax specialist hasn't had the time to go into the weeds here like I have.
Employee retention credit, why is it so financially rewarding for organization owners in 2021 and why weren't we talking about it in 2020, it's been around given that then, given that the CARES Act? Yes, the employee retention credit has been around since 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.
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 organization owners in 2021. Why is the employee retention credit more attractive now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act?
Why Employee Retention Tax Credit And Ppp
First reason, the employee retention credit for both 2020 and 2021 is now readily available to PPP recipients, however obviously you can't double dip. You can't get PPP for the hundred thousand dollars you paid your employees and after that turn around and declare the employee retention credit on those salaries also. The federal government doesn't look too fondly on paying your payroll for you through the PPP and then you claiming a credit against the taxes you pay the federal government on those salaries that the federal government spent for you. That makes sense. Now, there's some planning here. 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 very best covered period that will get you full PPP forgiveness however likewise optimize your employee retention credit.
Likewise, for PPP forgiveness, you wish to fill that payroll pail with as many expenses as possible that don't count for employee retention credit functions. You can't claim the employee retention credit on state joblessness insurance coverage contributions, however state joblessness insurance contributions count toward PPP forgiveness, see? So you 'd desire to dump all your state joblessness insurance coverage contributions on your PPP forgiveness application to leave as much common wages as possible to take the employee retention credit on.
Another thing to note is you can't subtract the salaries you declared the employee retention credit on, and that makes sense as well, why should the government give you a reduction for these wages that they currently offered you a credit for? Alright, sorry for getting a little sidetracked there, I simply enjoy talking about this things, but let's talk about another reason why the employee retention credit is more attractive now than it was last year, and that is that it's easier to qualify for the employee retention credit in 2021.
However in 2021, for a quarter to get approved for the employee retention credit, you only require to show a 20% decrease in gross invoices compared to the very same calendar quarter in 2019. So this suggests even more organizations will qualify. My organization, for example, experienced a 26% decline in gross invoices, comparing Q1 2019 to Q1 2021, and it was a similar story in 2015 too.
So I didn't certify for the 2020 employee retention credit initially, since I got very 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 organization certifies. For 2021, for any quarter, you can choose to utilize the lookback quarter, implying 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 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 get approved for Q1 2021 based on Q1 2021's gross receipts, you will likewise get approved for Q2 2021 considering that you certified in the lookback quarter of Q1 2021.
Exact same thing for Q2 to Q3 and Q3 to Q4, so generally if you simply get approved for Q1 and Q3 2021, you also get approved for Q2 and Q4 based on the lookback. Even if you didn't have an adequate decline in profits, you can certify for the employee retention credit if you were required to completely or partly suspend operations in your company 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 during that period of partial or full shutdown.
Typical example, you own a dining establishment, and your guv signed an executive order specifying that you need to shut down indoor dining. That is an example of a partial shutdown. Also, not just are more businesses eligible for the employee retention credit thanks to these new laws, making PPP recipients qualified for the employee retention credit though not on the same earnings and making more services eligible through the 20% decrease limit rather than the 50% decline limit, however the 2021 credit is likewise more lucrative than the 2020 credit.
This is since for 2020, the employee retention credit was equal to 50% of all qualified wages for 2020, the employee retention credit amounted to 50% of all certified incomes you paid workers between March 12, 2020, and December 31, 2020, with a limitation of $10,000 in wages for that entire time duration. The optimum 2020 credit per worker was $5,000. Not bad, but that's absolutely nothing compared to the 2021 credit since for 2021, the credit amounts to 70% of certified incomes per worker paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in incomes per employee ... for that entire time 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 incomes per staff member per quarter, so we're talking about an optimum credit of $7,000 per employee per quarter. $7,000 times four 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 huge. That's a godsend to many business owners right now. So you see what I mean now, right, how the employee retention credit has gone from ugly duckling in 2020 to gorgeous swan in 2021, right? And by the method, by the method, certified salaries includes employer-paid health insurance premiums.
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 duration that will get you full PPP forgiveness but likewise maximize your employee retention credit.
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 appealing now than it was last year, and that is that it's simpler 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 very first round of PPP cash and second since my company 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. Not only are more services 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 same wages and making more organizations eligible through the 20% decrease threshold rather than the 50% decline threshold, however the 2021 credit is likewise more lucrative than the 2020 credit.
Not bad, but that's nothing compared to the 2021 credit due to the fact that for 2021, the credit is equal to 70% of qualified incomes per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in salaries per worker ... for that whole time period?
Just How to Get going
That will certainly discuss on part of their clients to get the best costs possible for their existing clients. They will investigate old invoices for mistakes getting their customers refunds and tax credits.
Services provided can include:
Devoted professionals that will interpret very intricate program guidelines and also will be readily available to answer your questions, including:
Just how does the PPP finance variable right into the ERC?
What are the differences between the 2020 as well as 2021 programs and exactly how does it relate to your business?
What are gathering rules for bigger, multi-state companies, and also how do I translate multiple states executive orders?
How do part-time, Union, and tipped employees impact the quantity of my refunds?
Complete assessment concerning your qualification
Thorough evaluation of your case
Guidance on the declaring process and also paperwork
Particular program knowledge that a normal CPA or pay-roll cpu may not be well-versed in
Smooth as well as rapid end-to-end procedure, from eligibility to asserting and also getting 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 Get Going? Its Simple.
1. Whichever company you choose to work with will certainly identify whether your organization certifies for the ERC.
2. They will certainly assess your case and also compute the maximum quantity you can get.
3. Their team guides you with the claiming process, from starting to finish, consisting of appropriate documentation.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program started on March 13th, 2020 and ends on September 30, 2021, for qualified organizations.
You can look for reimbursements for 2020 as well as 2021 after December 31st of this year, right into 2022 and also 2023. And potentially past then too.
Many services have received reimbursements, as well as others, in addition to refunds, additionally qualified to continue obtaining ERC in every payroll they process through December 31, 2021, at close to 30% of their payroll cost.
Some businesses have actually gotten reimbursements from $100,000 to $6 million.
Do we still qualify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, companies can now receive the ERC even if they already received a PPP finance. Note, though, that the ERC will only apply to incomes not used for the PPP.
maintain a 20% decline in gross invoices .
A federal government authority called for partial or full shutdown of your business during 2020 or 2021. This includes your procedures being limited by business, failure to travel or limitations of group meetings.
- Gross receipt reduction criteria is various for 2020 as well as 2021, yet is determined against the existing quarter as compared to 2019 pre-COVID amounts:
- A government authority needed full or partial closure of your service throughout 2020 or 2021. This includes your operations being restricted by commerce, inability to travel or restrictions of group conferences.
- Gross receipt decrease requirements is various for 2020 as well as 2021, however is measured against the present quarter as contrasted to 2019 pre-COVID amounts.
Do we still qualify if we remained open throughout the pandemic?
Yes. To certify, your business should satisfy either one of the following standards:
- Experienced a decrease in gross receipts by 20%, or
- Had to transform organization procedures because of government orders
Many items are thought about as adjustments in organization procedures, including shifts in task roles and also the purchase of extra protective devices.