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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 things your CPA must worry about, I am not going to get into the complexities of that form here or the Form 941 and all the payroll things. In this video I desire to tell you what you need to know so you can go to your CPA and state, "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 situations, of your company's tax scenario to produce more money circulation in your business and more wealth for yourself.
Solutions supplied can include:
Devoted experts that will analyze extremely complicated program guidelines and will be offered to address your concerns, including:
What duration does the program cover?
Mount Vernon NY Employee Retention Qualifications
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 Works
This is big, a lot of small business owners don't understand about this, or they've found out about it, however they do not understand much about it, even lots of tax professionals do not understand the ins and outs of this thing since it's new and a lot of these changes
that are helpful to company 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 financially rewarding now in 2021, more financially rewarding, even more profitable, in truth now than it was in 2020, 5x more profitable a minimum of. Even if you don't own an organization, be sure to share this video with business owners you understand, this video could literally be worth 10s 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 likewise be either a CPA like myself or an EA, shoot me an e-mail, [email protected], inform me a little about your organization and your ballpark year-over-year profits, 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 decreasing 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. Since that's the things your CPA must worry about, I am not going to get into the complexities of that form here or the Form 941 and all the payroll things. In this video I desire to tell you what you need to know so you can go to your CPA and state, "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 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 Qualifications
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 nothing in this video is to be taken as legal or tax guidance, this video is for general informative functions only, yes, I am a CPA and a tax professional, but I am not your CPA nor your tax expert unless you have actually engaged my company as such. Another disclaimer here, for functions of this video I am assuming that if you're seeing this you are a small company owner, which for employee retention credit purposes means one hundred or fewer employees for purposes of the 2020 credit and five hundred or less employees for purposes of the 2021 credit, if you have a company with over 5 hundred employees I envision you have in-house counsel, in-house CPAs who are on top of this things, but I'm here for you small company owners who may deal with a regional tax professional who is so neck-deep in tax returns today due to the fact that the federal government extended the tax deadline to May 17 or volume is simply the nature of their service 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 considering that then, considering 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 since of the PPP, the Paycheck Protection Program.
Generally the employee retention credit had a glow-up between 2020 and 2021, it went from the unpopular woman with neglected 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 Qualifications
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 employees and then turn around and claim the employee retention credit on those salaries. If you got PPP and you are eligible for the employee retention credit, then when you do your PPP forgiveness application, you need to pick the best covered duration that will get you full PPP forgiveness but likewise maximize your employee retention credit.
Also, for PPP forgiveness, you wish to fill up that payroll bucket with as many expenses as possible that don't count for employee retention credit purposes. For instance, you can't declare the employee retention credit on state unemployment insurance contributions, but state unemployment insurance contributions count toward PPP forgiveness, see? You 'd want to dispose all your state joblessness insurance contributions on your PPP forgiveness application to leave as much ordinary wages as possible to take the employee retention credit on.
This can get very technical very quick and it's very situation particular in terms of enhancing PPP vs. ERC and my firm has tools to figure this stuff out for you, I'm not going to dig into all that here, but just understand that you truly have to do the mathematics when doing your PPP forgiveness to make sure you're not leaving anything on the table in terms of the employee retention credit. Another thing to note is you can't deduct the earnings you declared the employee retention credit on, and that makes good sense as well, why should the federal government give you a deduction for these salaries that they currently gave you a credit for? Essentially the credit is tax-effected. Alright, sorry for getting a little sidetracked there, I simply love speaking about this stuff, however let's discuss another reason that 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 2020, for a quarter to receive the employee retention credit, you needed to reveal a 50% reduction in gross receipts compared to the exact same calendar quarter in 2019.
However in 2021, for a quarter to get approved for the employee retention credit, you only need to reveal a 20% decrease in gross receipts compared to the very same calendar quarter in 2019. This indicates far more businesses will qualify. My organization, for example, experienced a 26% decrease in gross invoices, comparing Q1 2019 to Q1 2021, and it was a comparable story in 2015 too.
So I didn't qualify for the 2020 employee retention credit initially, due to the fact that I got preliminary of PPP cash and 2nd due to the fact that my organization didn't suffer that big 50% decrease needed to receive the employee retention credit last year.But for 2021, a minimum of for Q1, yeah, my company certifies. For 2021, for any quarter, you can elect to use 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 invoices, you can compare for purposes of identifying 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 invoices, you will also get approved for Q2 2021 because you qualified in the lookback quarter of Q1 2021.
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. Even if you didn't have an enough decrease in revenue, you can qualify 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 qualified for the employee retention credit during that period of partial or complete shutdown.
Typical example, you own a restaurant, and your governor signed an executive order specifying that you require 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 receivers qualified for the employee retention credit though not on the exact same earnings and making more businesses eligible through the 20% decline limit rather than the 50% decrease threshold, but the 2021 credit is also more profitable than the 2020 credit.
This is since for 2020, the employee retention credit amounted to 50% of all qualified salaries for 2020, the employee retention credit was equal to 50% of all certified wages you paid staff members in between March 12, 2020, and December 31, 2020, with a limitation of $10,000 in incomes for that entire period. The maximum 2020 credit per staff member was $5,000. Okay, but that's nothing compared to the 2021 credit since for 2021, the credit amounts to 70% of qualified incomes per worker paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in earnings per staff member ... for that entire period? No. Per quarter. For 2021 the percentage 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. If you're qualified all four quarters, $7,000 times 4 is $28,000. That's right, folks, the maximum 2021 employee retention credit is $28,000 per employee. That's big. That's a godsend to many organization owners today. So you see what I suggest now, right, how the employee retention credit has gone from awful duckling in 2020 to gorgeous swan in 2021, right? And by the method, by the method, qualified wages includes employer-paid health insurance coverage premiums.
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 complete PPP forgiveness but also optimize 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 qualify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit first, since I got first round of PPP cash and 2nd because my business didn't suffer that large 50% decline needed to certify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my business qualifies. Not only are more organizations eligible for the employee retention credit thanks to these new laws, making PPP recipients eligible for the employee retention credit though not on the same incomes and making more businesses eligible through the 20% decrease limit rather than the 50% decline threshold, but the 2021 credit is likewise more lucrative than the 2020 credit.
Not bad, however that's nothing compared to the 2021 credit since for 2021, the credit is equivalent to 70% of certified earnings per worker paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in salaries per staff member ... for that entire time duration?
Just How to Start
The best means is to deal with a no-risk, contingency-based cost financial savings firm. That will work out in support of their clients to get the ideal rates possible for their existing customers. They will certainly examine old billings for mistakes getting their customers reimbursements and also credits. They can boost the earnings as well as general valuation of their customers companies.
Solutions supplied can include:
Devoted experts that will analyze extremely complicated program guidelines and will be offered to address your concerns, including:
Just how does the PPP lending element right into the ERC?
What are the differences between the 2020 and 2021 programs and also just how does it apply to your service?
What are gathering policies for larger, multi-state employers, as well as exactly how do I translate several states executive orders?
Just how do part-time, Union, and also tipped employees affect the amount of my refunds?
Thorough evaluation regarding your qualification
Thorough analysis of your case
Guidance on the claiming procedure as well as paperwork
Specific program expertise that a normal certified public accountant or pay-roll cpu might not be well-versed in
Smooth and fast end-to-end procedure, from eligibility to asserting and obtaining reimbursements
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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/ |
All Set To Get Going? Its Simple.
1. Whichever business you select to work with will certainly figure out whether your organization certifies for the ERC.
2. They will evaluate your claim as well as compute the optimum amount you can obtain.
3. Their group guides you through the asserting process, from starting to end, consisting of appropriate paperwork.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program began on March 13th, 2020 and also right on September 30, 2021, for qualified companies.
You can get reimbursements for 2020 and also 2021 after December 31st of this year, into 2022 and also 2023. And possibly past after that as well.
Many services have received refunds, and also others, in enhancement to refunds, additionally certified to continue obtaining ERC in every payroll they process through December 31, 2021, at around 30% of their payroll cost.
Some services have obtained 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 get the ERC even if they already obtained a PPP loan. Note, however, that the ERC will only use to salaries not made use of for the PPP.
sustain a 20% decrease in gross invoices .
A federal government authority called for partial or complete shutdown of your company throughout 2020 or 2021. This includes your procedures being restricted by business, inability to travel or constraints of team conferences.
- Gross receipt reduction standards is various for 2020 and also 2021, however is measured against the current quarter as contrasted to 2019 pre-COVID quantities:
- A government authority needed partial or complete closure of your organization throughout 2020 or 2021. This includes your procedures being restricted by business, lack of ability to take a trip or limitations of group meetings.
- Gross invoice reduction requirements is different for 2020 and 2021, however is determined versus the existing quarter as contrasted to 2019 pre-COVID quantities.
Do we still certify if we remained open during the pandemic?
Yes. To certify, your organization needs to satisfy either among the adhering to standards:
- Experienced a decline in gross receipts by 20%, or
- Needed to transform service procedures as a result of government orders
Many products are thought about as adjustments in business operations, including shifts in job functions and also the purchase of additional protective tools.