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Mott Haven NY Employee Retention Grant Program


Can you take the employee retention credit on the salaries paid of your S corporation to you, the 100% owner? Now, this is a big dispute in the tax expert neighborhood today. I'm not going to hang my hat on any one position until we get more clarification from the IRS on this, but if I needed to lean one method or the other, I would lean in the direction of stating that owner incomes insofar as we're speaking about somebody who owns more than 50 percent of business, do not certify.

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I do not wish to get too technical here, but Area 2301(e) of the CARES Act -- which created the employee retention credit -- states that for functions of the employee retention credit, "rules comparable to the guideline of areas 51(i)( 1) and 280C(a) of the Internal Earnings Code of 1986 will apply," don't get caught up on the 1986, that's simply the last time the Internal Revenue Code had a major overhaul, so it's simply described as the Internal Revenue Code of 1986. The vital part here is those other code sections referral.

Because that's the easy one, let's start with 280C(a). That is simply saying that if you get a credit on some earnings you pay in your organization, you can't double dip and take a deduction for those same wages. And now let's discuss section 51(i)( 1 ), which says, "No salaries shall be taken into consideration ...

with respect to an individual who bears any of the relationships described in subparagraphs (A) through (G) of section 152(d)( 2) to the taxpayer, or, if the taxpayer is a corporation, to an individual who owns, straight or indirectly, more than 50 percent in value of the impressive stock of the corporation, or, if the taxpayer is an entity aside from a corporation, to any person who owns, directly or indirectly, more than 50 percent of the capital and profits interests in the entity." Let's focus on the provision that says "if the taxpayer is a corporation" because we're assuming an S corp taxpayer here.

This is stating that you don't take into account salaries with respect to a person who owns, directly or indirectly, more than 50 percent in worth of the exceptional stock of the corporation. That appears clear to me that owner salaries do not qualify. Now, some tax professionals are looking at the employee retention credit certified incomes FAQs on the IRS site, and they're looking at FAQ 59, which states, "Are earnings paid by a company to employees who belong individuals thought about qualified salaries?

" and they're saying, "Look at the response here. It's only these family members whose earnings do not count. And the IRS didn't specifically state owner incomes or spouse incomes do not count here, so bad-a-boo, bad-a-bing, therefore owner incomes should count." To that, I would say, "Look. The IRS website is not the tax code.



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About Employee Retention Grant Program

If there's a difference between the IRS website and the tax code, and there are plenty, believe me, the tax code wins every single time. You can't state, 'Well, it said such and such on the IRS's website!'" And in this case, it's an argument by omission.

You're stating, "Well, the IRS site does not clearly state that owner wages are left out so for that reason they need to be okay." No, take a look at the code and the regs too, though of course the code is more authoritative than the regs.

However on the other hand, the area in the CARES Act itself about this is admittedly unclear, all it states is, "For purposes of this section, guidelines comparable to the guidelines of sections 51( i)( 1) and 280C( a) of the Internal Revenue Code of 1986 shall apply." "Rules similar to ..." What does that mean? It's up to Treasury to figure this out. My take on this right now, unless the IRS comes out and absolutely states otherwise, I'm assuming that you can't take the employee retention credit on owner incomes.

And it's the very same if it's, you know, a husband-wife-owned business, let's state both own 50%, well, sorry you're related so neither of your salaries qualify either, nor loved ones you employ, kids, brother or sisters, and so on. Alright, folks, that's what I have for you here, of course I'm just scratching the surface area especially with that interaction in between the PPP and the employee retention credit. If you wish to to

Why Employee Retention Grant Program?

It undertook a number of modifications and has numerous technological information, including how to identify certified incomes, which staff members are qualified, and more. Your company details instance may need even more intensive review and also evaluation. The program is complex and may leave you with lots of unanswered inquiries.

There are several Business that can help make clear of it all, that have actually committed specialists that will certainly guide you, and describe the actions you need to take so you can maximize the application for your company.



Just How to Get Moving|Get going

Below you will find a list of Companies that can help you get started.

Directory For Employee Retention Grant Program Companies Available in Mott Haven NY
Equifax Workforce Solutions
Valiant Capital
NYC Business
Omega Funding solutions
Disisaster Loan Advisors
ERTC Filing
Adams Brown Strategic Allies and CPAs
Finance Pro Plus
Bottom Line Concepts

Ready To Get Begun? Its Simple.
1. Whichever business you pick  to work with will certainly figure out whether your service certifies and gets approvel for the ERC.

2. They will certainly evaluate your case and also calculate the optimum amount you can get.

3. Their team overviews you via the claiming procedure, from beginning to end, including correct documentation.

Frequently Asked Questions (FAQs)

What period does the program cover?

The program began on March 13th, 2020 as well as ends on September 30, 2021, for qualified organizations.

You can obtain reimbursements for 2020 as well as 2021 after December 31st of this year, into 2022 and also 2023. And possibly past then also.

Many services have received refunds, as well as others, in enhancement to reimbursements, additionally certified to proceed receiving ERC in every pay-roll they refine through December 31, 2021, at about 30% of their payroll cost.

Some organizations have obtained refunds from $100,000 to $6 million.
Do we still certify if we already took the PPP?

Yes. Under the Consolidated Appropriations Act, services can now receive the ERC also if they already got a PPP funding. Keep in mind, however, that the ERC will just relate to incomes not used for the PPP.

Do we still accredit if we did not sustain a 20% reduction in gross receipts .

A government authority needed complete or partial shutdown of your service during 2020 or 2021. This includes your procedures being restricted by commerce, lack of ability to take a trip or constraints of group meetings.

  • Gross receipt decrease standards is various for 2020 and also 2021, however is measured against the existing quarter as compared to 2019 pre-COVID amounts:

    • A government authority needed partial or full closure of your organization throughout 2020 or 2021. This includes your operations being restricted by commerce, inability to take a trip or limitations of group conferences.
    • Gross invoice reduction requirements is different for 2020 as well as 2021, however is measured against the current quarter as contrasted to 2019 pre-COVID amounts.
Do we still qualify if we remained open throughout the pandemic?

Yes. To certify, your business needs to satisfy either one of the following criteria:

  • Experienced a decrease in gross receipts by 20%, or
  • Needed to alter company operations due to federal government orders

Many things are taken into consideration as adjustments in service procedures, consisting of shifts in work functions and also the purchase of additional protective tools.