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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 things your CPA should fret about, I am not going to get into the complexities of that type here or the Form 941 and all the payroll stuff. In this video I desire to tell you what you need to understand so you can go to your CPA and say, "Hey, what about this employee retention credit, why have not you told me about this?" You can be informed and take ownership of your own tax situations, of your company's tax scenario to produce more money circulation in your business and more wealth for yourself.
Solutions provided can include:
Devoted experts that will certainly interpret highly intricate program policies and will certainly be readily available to answer your inquiries, including:
What duration does the program cover?
Mount Vernon 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.
Exactly How It Functions
This is big, a lot of little business owners do not learn about this, or they've become aware of it, but they don't 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 changes
that are advantageous to entrepreneur happened 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 rewarding, far more financially rewarding, in fact now than it was in 2020, 5x more rewarding at least. Even if you don't own a service, be sure to share this video with service owners you know, this video might literally be worth tens of thousands of dollars for them. And if you are a company owner and after you enjoy this video you want 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 email, [email protected], tell 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 due to the fact that you can take this credit versus 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. Because that's the things your CPA should fret about, I am not going to get into the complexities of that type here or the Form 941 and all the payroll stuff. In this video I desire to tell you what you need to understand so you can go to your CPA and say, "Hey, what about this employee retention credit, why have not you told me about this?" You can be informed and take ownership of your own tax situations, of your company's tax scenario to produce more money circulation in your business and more wealth for yourself.
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About Employee Retention Program
Alright, now let's dig into this and let's talk about 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 general informational functions just, yes, I am a tax and a cpa expert, however I am not your CPA nor your tax expert unless you have engaged my company as such. Another disclaimer here, for functions of this video I am assuming that if you're watching this you are a small service owner, which for employee retention credit purposes suggests one hundred or less staff members for functions of the 2020 credit and five hundred or less staff members for functions of the 2021 credit, if you have a business with over 5 hundred staff members I envision you have in-house counsel, in-house CPAs who are on top of this stuff, but I'm here for you small company owners who might deal with a regional tax expert who is so neck-deep in income tax return right now due to the fact that the federal government extended the tax deadline to May 17 or volume is just the nature of their business that your tax expert hasn't had the time to go into the weeds here like I have.
Employee retention credit, why is it so rewarding for business owners in 2021 and why weren't we talking about it in 2020, it's been around since then, given that the CARES Act? Yes, the employee retention credit has actually been around considering that 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 because of the PPP, the Paycheck Protection Program.
Basically the employee retention credit had a glow-up between 2020 and 2021, it went from the nerdy girl with unkempt eyebrows and thick glasses and her hair up in 2020 to the belle of the ball for business 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
Factor, the employee retention credit for both 2020 and 2021 is now offered to PPP recipients, but of course you can't double dip. You can't get PPP for the hundred thousand dollars you paid your employees and then reverse and declare the employee retention credit on those wages as well. The federal government does not 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 federal government on those incomes that the government paid for you. That makes sense. Now, there's some preparation here. If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you require to pick the finest covered period that will get you complete PPP forgiveness however also optimize your employee retention credit.
For PPP forgiveness, you want to fill up that payroll bucket with as lots of expenses as possible that don't count for employee retention credit purposes. For instance, you can't claim the employee retention credit on state unemployment insurance coverage contributions, however state unemployment insurance contributions count towards PPP forgiveness, see? You 'd desire to discard all your state unemployment insurance contributions on your PPP forgiveness application to leave as much ordinary incomes as possible to take the employee retention credit on.
Another thing to note is you can't deduct the salaries you claimed the employee retention credit on, and that makes sense as well, why should the federal government offer you a reduction for these incomes that they currently offered you a credit for? Alright, sorry for getting a little sidetracked there, I simply like 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.
But 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. This means far more companies will qualify. My service, for instance, experienced a 26% decrease in gross receipts, comparing Q1 2019 to Q1 2021, and it was a similar story last year too.
So I didn't receive the 2020 employee retention credit initially, since I got first round of PPP money and second since my company didn't suffer that big 50% decline needed to get approved for the employee retention credit last year.But for 2021, at least for Q1, yeah, my company certifies. Also, for 2021, for any quarter, you can elect 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 invoices, 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. Implication here is that if you receive Q1 2021 based on Q1 2021's gross receipts, you will likewise qualify for Q2 2021 because you certified in the lookback quarter of Q1 2021.
Exact same thing for Q2 to Q3 and Q3 to Q4, so basically if you just receive 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 profits, you can certify for the employee retention credit if you were needed to fully or partly suspend operations in your company 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 during that period of complete or partial shutdown.
Typical example, you own a dining establishment, and your guv signed an executive order mentioning that you need to close down indoor dining. That is an example of a partial shutdown. Likewise, not just are more companies qualified for the employee retention credit thanks to these new laws, making PPP receivers qualified for the employee retention credit though not on the very same earnings and making more companies eligible through the 20% decrease threshold rather than the 50% decrease limit, but the 2021 credit is likewise more profitable than the 2020 credit.
Not bad, however that's nothing compared to the 2021 credit because for 2021, the credit is equivalent to 70% of qualified earnings per worker paid from January 1, 2021 through December 31, 2021, limited to $10,000 in salaries 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 earnings per worker per quarter, so we're talking about a maximum 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 qualified for the employee retention credit, then when you do your PPP forgiveness application, you require to choose the finest covered duration that will get you full PPP forgiveness but also optimize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just 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 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 cash and second since my organization didn't suffer that large 50% decrease required to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my organization certifies. Not just 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 exact same wages and making more organizations eligible through the 20% decline limit rather than the 50% decline threshold, but the 2021 credit is likewise 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 salaries per employee paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in salaries per employee ... for that entire time period?
Exactly How to Get going
The most effective method is to function with a no-risk, contingency-based expense financial savings business. That will work out in behalf of their clients to obtain the most effective rates possible for their existing customers. They will certainly audit old invoices for errors getting their clients reimbursements and also credits. They can boost the success and also overall appraisal of their customers companies.
Solutions provided can include:
Devoted experts that will certainly interpret highly intricate program policies and will certainly be readily available to answer your inquiries, including:
Just how does the PPP funding variable into the ERC?
What are the distinctions in between the 2020 and also 2021 programs as well as how does it use to your company?
What are gathering rules for larger, multi-state employers, and also just how do I analyze several states executive orders?
Exactly how do part-time, Union, as well as tipped staff members influence the amount of my refunds?
Extensive assessment concerning your eligibility
Thorough evaluation of your situation
Support on the claiming process and also paperwork
Details program competence that a routine CPA or payroll processor may not be well-versed in
Rapid as well as smooth end-to-end process, from eligibility to claiming as well as obtaining 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/ |
Prepared To Get Going? Its Simple.
1. Whichever business you select to work with will certainly figure out whether your business certifies for the ERC.
2. They will certainly evaluate your claim and compute the maximum quantity you can get.
3. Their team guides you through the asserting process, from beginning to finish, consisting of proper paperwork.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program started on March 13th, 2020 and also finishes on September 30, 2021, for qualified businesses.
You can make an application for reimbursements for 2020 as well as 2021 after December 31st of this year, right into 2022 and 2023. And also potentially past then as well.
Many services have received refunds, and also others, in addition to refunds, also qualified to continue receiving ERC in every pay-roll they process through December 31, 2021, at around 30% of their pay-roll cost.
Some organizations have actually received reimbursements from $100,000 to $6 million.
Do we still qualify if we currently took the PPP?
Yes. Under the Consolidated Appropriations Act, businesses can currently receive the ERC also if they already obtained a PPP car loan. Note, however, that the ERC will only put on earnings not used for the PPP.
sustain a 20% decrease in gross billings .
A federal government authority needed complete or partial closure of your business throughout 2020 or 2021. This includes your operations being restricted by commerce, inability to travel or constraints of group conferences.
- Gross receipt reduction criteria is various for 2020 as well as 2021, however is measured versus the present quarter as contrasted to 2019 pre-COVID quantities:
- A federal government authority needed partial or full shutdown of your company during 2020 or 2021. This includes your operations being limited by commerce, lack of ability to take a trip or limitations of team meetings.
- Gross receipt reduction criteria is various for 2020 and 2021, yet is gauged versus the present quarter as compared to 2019 pre-COVID amounts.
Do we still certify if we remained open throughout the pandemic?
Yes. To qualify, your organization has to meet either one of the following standards:
- Experienced a decrease in gross receipts by 20%, or
- Needed to change service operations because of government orders
Several items are taken into consideration as modifications in organization operations, including changes in job duties and also the acquisition of extra protective devices.