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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.
Solutions provided can include:
Committed specialists that will certainly analyze very complex program rules as well as will be available to address your questions, including:
What duration does the program cover?
Orangetown NY Employee Retention 2020 Ertc 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.
Just how It Functions
Even if you don't own a service, be sure to share this video with company owners you understand, this video might literally be worth 10s of thousands of dollars for them. And if you are an organization owner and after you enjoy this video you want 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 service and your ballpark year-over-year earnings, 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 against your payroll taxes you pay by reducing your needed 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 stuff your CPA ought to worry 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 wish 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 haven't you informed me about this?" You can be informed and take ownership of your own tax scenarios, of your business's tax circumstance to create more money circulation in your business and more wealth for yourself.
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About Employee Retention 2020 Ertc Qualifications
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, before I get 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 professional, however I am not your CPA nor your tax professional unless you have engaged my firm. Another disclaimer here, for purposes of this video I am assuming that if you're seeing this you are a small service owner, which for employee retention credit purposes implies one hundred or fewer staff members for functions of the 2020 credit and 5 hundred or fewer workers for functions of the 2021 credit, if you have a business with over five hundred employees I picture you have in-house counsel, in-house CPAs who are on top of this things, however I'm here for you small company owners who might deal with a regional tax professional who is so neck-deep in tax returns right now since the federal government extended the tax due date to May 17 or volume is simply the nature of their business that your tax specialist hasn't had the time to go into the weeds here like I have.
So employee retention credit, why is it so profitable for business owners in 2021 and why weren't we talking about it in 2020, it's been around ever since, given that the CARES Act? Why is it getting all this buzz now that it wasn't last year? Well, let's back it up. Yes, the employee retention credit has been around because 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. Originally, in 2020, if you got a PPP loan as an employer, you were not qualified for the employee retention credit.
The stimulus costs passed in December, the Consolidated Appropriations Act, as well as the American Rescue Plan Act, passed in February 2021, made modifications to the ERC making it much more appealing. Basically the employee retention credit had a glow-up between 2020 and 2021, it went from the nerdy girl with neglected eyebrows and thick glasses and her hair up in 2020 to the belle of the ball for organization owners in 2021. Why? Why is the employee retention credit more attractive now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act? I'll inform you why, a couple of reasons.
Why Employee Retention 2020 Ertc Qualifications
First factor, the employee retention credit for both 2020 and 2021 is now readily available to PPP receivers, however of course you can't double dip. You can't get PPP for the hundred thousand dollars you paid your workers and then turn around and claim the employee retention credit on those earnings. 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 federal government on those salaries that the government spent for you. So that makes sense. Now, there's some planning 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 pick the finest covered duration that will get you full PPP forgiveness but also maximize your employee retention credit.
For PPP forgiveness, you want to fill up that payroll container with as lots of expenses as possible that do not count for employee retention credit functions. For example, you can't declare the employee retention credit on state joblessness insurance coverage contributions, however state joblessness insurance coverage contributions count towards PPP forgiveness, see? You 'd desire to dispose all your state joblessness insurance coverage contributions on your PPP forgiveness application to leave as much common salaries as possible to take the employee retention credit on.
Another thing to note is you can't deduct the incomes you claimed the employee retention credit on, and that makes sense as well, why should the federal government provide you a deduction for these salaries that they already offered you a credit for? Alright, sorry for getting a little sidetracked there, I just enjoy talking about this stuff, however 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 simpler to certify for the employee retention credit in 2021.
In 2021, for a quarter to qualify for the employee retention credit, you just require to show a 20% reduction in gross receipts compared to the very same calendar quarter in 2019. So this indicates even more services will qualify. My business, for instance, experienced a 26% decrease 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 preliminary of PPP cash and second because my service didn't suffer that large 50% decrease required to receive the employee retention credit last year.But for 2021, a minimum of for Q1, yeah, my organization qualifies. Likewise, for 2021, for any quarter, you can elect to use 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 functions 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 upon Q1 2021's gross receipts, you will also qualify for Q2 2021 since you qualified in the lookback quarter of Q1 2021.
Exact same thing for Q2 to Q3 and Q3 to Q4, so essentially if you just qualify for Q1 and Q3 2021, you also get approved for Q2 and Q4 based upon the lookback. Even if you didn't have a sufficient decline in earnings, you can qualify for the employee retention credit if you were required to completely or partly suspend operations in your service 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 governor signed an executive order specifying that you require to close down indoor dining. That is an example of a partial shutdown. Not just are more companies eligible for the employee retention credit thanks to these brand-new laws, making PPP recipients qualified for the employee retention credit though not on the same wages and making more businesses eligible through the 20% decrease threshold rather than the 50% decrease limit, however the 2021 credit is likewise more profitable than the 2020 credit.
Not bad, but that's absolutely nothing compared to the 2021 credit since for 2021, the credit is equivalent to 70% of certified incomes per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in salaries per staff member ... for that whole time period? For 2021 the portion is more (70% in 2021 vs. 50% in 2020) and you can take it on up to $10,000 in earnings per staff member per quarter, so we're talking about an optimum credit of $7,000 per employee 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 need to select the finest covered period that will get you full PPP forgiveness but also optimize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I just love talking about this stuff, but let's talk about another reason why the employee retention credit is more appealing now than it was last year, and that is that it's much easier to certify for the employee retention credit in 2021. I didn't qualify for the 2020 employee retention credit first, due to the fact that I got first round of PPP money and 2nd due to the fact that my company didn't suffer that large 50% decrease needed to qualify for the employee retention credit last year.But for 2021, at least for Q1, yeah, my service qualifies. Not only are more services qualified for the employee retention credit thanks to these brand-new laws, making PPP recipients eligible for the employee retention credit though not on the same incomes and making more organizations eligible through the 20% decline 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 because for 2021, the credit is equal to 70% of certified salaries per staff member paid from January 1, 2021 through December 31, 2021, restricted to $10,000 in earnings per employee ... for that entire time period?
How to Start
The most effective way is to function with a no-risk, contingency-based cost financial savings firm. That will bargain in behalf of their clients to obtain the most effective costs feasible for their existing customers. They will certainly audit old billings for errors obtaining for their clients refunds as well as credits. They can raise the success and also total evaluation of their customers organizations.
Solutions provided can include:
Committed specialists that will certainly analyze very complex program rules as well as will be available to address your questions, including:
Just how does the PPP funding aspect into the ERC?
What are the differences between the 2020 as well as 2021 programs and how does it put on your company?
What are aggregation regulations for bigger, multi-state employers, as well as how do I analyze numerous states executive orders?
Exactly how do part-time, Union, and tipped employees affect the amount of my refunds?
Complete analysis regarding your eligibility
Comprehensive evaluation of your case
Advice on the declaring procedure and documents
Details program experience that a normal CPA or payroll cpu could not be well-versed in
Smooth and fast end-to-end process, from eligibility to declaring and receiving refunds
| 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/ |
All Set To Start? Its Simple.
1. Whichever firm you choose to work with will determine whether your organization qualifies for the ERC.
2. They will analyze your claim and also compute the maximum quantity you can get.
3. Their group overviews you with the asserting process, from starting to finish, consisting of correct paperwork.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program started on March 13th, 2020 and finishes on September 30, 2021, for eligible employers.
You can obtain reimbursements for 2020 and 2021 after December 31st of this year, into 2022 and also 2023. And possibly past after that too.
Many businesses have received refunds, as well as others, along with reimbursements, also qualified to continue receiving ERC in every pay-roll they refine to December 31, 2021, at about 30% of their pay-roll cost.
Some businesses have actually obtained reimbursements from $100,000 to $6 million.
Do we still certify if we already took the PPP?
Yes. Under the Consolidated Appropriations Act, organizations can currently qualify for the ERC also if they currently obtained a PPP loan. Note, however, that the ERC will only relate to salaries not utilized for the PPP.
Do we still qualify if we did not incur a 20% decline in gross invoices .
A federal government authority needed complete or partial shutdown of your organization throughout 2020 or 2021. This includes your procedures being limited by commerce, inability to take a trip or constraints of team meetings.
- Gross receipt reduction standards is different for 2020 and also 2021, yet is measured versus the existing quarter as contrasted to 2019 pre-COVID amounts:
- A federal government authority required full or partial closure of your company throughout 2020 or 2021. This includes your operations being limited by commerce, failure to take a trip or restrictions of team conferences.
- Gross invoice reduction standards is different for 2020 as well as 2021, but is measured against the current quarter as compared to 2019 pre-COVID quantities.
Do we still qualify if we stayed open throughout the pandemic?
Yes. To qualify, your business should meet either one of the adhering to standards:
- Experienced a decrease in gross invoices by 20%, or
- Had to transform service procedures because of government orders
Numerous items are taken into consideration as modifications in business operations, including changes in job roles and the purchase of added safety equipment.