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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 stuff your CPA should stress about, I am not going to get into the intricacies of that type here or the Form 941 and all the payroll stuff. In this video I want to inform you what you need to understand so you can go to your CPA and state, "Hey, what about this employee retention credit, why have not you informed me about this?" You can be notified and take ownership of your own tax circumstances, of your company's tax scenario to produce more cash flow in your organization and more wealth for yourself.
Assistance supplied can include:
Dedicated experts that will certainly interpret highly intricate program policies and also will be offered to address your questions, including:
What duration does the program cover?
Orangetown NY Employee Retention Tax Credit 2020
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 Works
This is huge, a great deal of little organization owners don't learn about this, or they've become aware of it, however they do not understand much about it, even lots of tax professionals don't know the ins and outs of this thing since it's brand-new and a great deal of these changes
that are useful 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 financially rewarding, far more rewarding, in fact now than it was in 2020, 5x more rewarding at least. Even if you don't own an organization, be sure to share this video with organization owners you know, this video could actually be worth tens of thousands of dollars for them. And if you are a service owner and after you enjoy 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 income, 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 reducing your required employment tax deposits or you can request an advance payment of the credit utilizing IRS Form 7200, Advance Payment of Employer Credits Due to COVID-19. Since that's the stuff your CPA should stress about, I am not going to get into the intricacies of that type here or the Form 941 and all the payroll stuff. In this video I want to inform you what you need to understand so you can go to your CPA and state, "Hey, what about this employee retention credit, why have not you informed me about this?" You can be notified and take ownership of your own tax circumstances, of your company's tax scenario to produce more cash flow in your organization and more wealth for yourself.
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About Employee Retention Tax Credit 2020
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 state that absolutely nothing in this video is to be taken as legal or tax guidance, this video is for general informative purposes only, yes, I am a CPA and a tax expert, but I am not your CPA nor your tax professional unless you have engaged my company. Another disclaimer here, for purposes of this video I am presuming that if you're enjoying this you are a little company owner, which for employee retention credit functions means one hundred or fewer employees for functions of the 2020 credit and five hundred or less workers for functions of the 2021 credit, if you have a company with over five hundred staff members I imagine 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 may work with a local tax expert who is so neck-deep in income tax return today due to the fact that the federal government extended the tax deadline to May 17 or volume is just the nature of their company that your tax specialist hasn't had the time to dig into the weeds here like I have.
Employee retention credit, why is it so lucrative for company owners in 2021 and why weren't we talking about it in 2020, it's been around considering that then, because the CARES Act? Yes, the employee retention credit has actually been around since 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.
The stimulus expense 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. So generally the employee retention credit had a glow-up in between 2020 and 2021, it went from the unpopular 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? Why is the employee retention credit more appealing now thanks to the Consolidated Appropriations Act and the American Rescue Plan Act? I'll tell you why, a few reasons.
Why Employee Retention Tax Credit 2020
Factor, the employee retention credit for both 2020 and 2021 is now 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 staff members and then turn around and claim the employee retention credit on those earnings. The government does not look too fondly on paying your payroll for you through the PPP and after that you declaring a credit versus the taxes you pay the government on those wages that the federal government paid for you. So that makes good 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 require to pick the very best covered period that will get you complete PPP forgiveness but likewise maximize your employee retention credit.
For PPP forgiveness, you want to fill up that payroll bucket with as numerous expenses as possible that do not count for employee retention credit purposes. For instance, you can't claim the employee retention credit on state unemployment insurance contributions, but state unemployment insurance contributions count toward PPP forgiveness, see? You 'd want to discard all your state joblessness insurance contributions on your PPP forgiveness application to leave as much regular earnings as possible to take the employee retention credit on.
So this can get very technical extremely quick and it's really situation specific in regards to optimizing 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 simply understand that you really need 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 incomes you claimed the employee retention credit on, which makes sense as well, why should the federal government provide you a deduction for these salaries that they currently offered you a credit for? So essentially the credit is tax-effected. Alright, sorry for getting a little sidetracked there, I simply love speaking about this things, but let's speak about another reason the employee retention credit is more appealing now than it was last year, and that is that it's easier to receive the employee retention credit in 2021. In 2020, for a quarter to certify for the employee retention credit, you had to show a 50% decrease in gross receipts compared to the very same calendar quarter in 2019.
In 2021, for a quarter to certify for the employee retention credit, you just need to show a 20% decline in gross receipts compared to the very same calendar quarter in 2019. So this implies far more organizations will certify. My business, for example, experienced a 26% decrease in gross invoices, comparing Q1 2019 to Q1 2021, and it was a comparable story last year too.
I didn't qualify for the 2020 employee retention credit initially, due to the fact that I got very first round of PPP money and second because my business 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 company certifies. Likewise, for 2021, for any quarter, you can elect to utilize the lookback quarter, meaning that, for instance, even if your Q1 2021 gross invoices aren't a minimum of 20% lower than your Q1 2019 gross invoices, 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 get approved for Q1 2021 based on Q1 2021's gross receipts, you will also get approved 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 basically if you just get approved for Q1 and Q3 2021, you also certify for Q2 and Q4 based upon the lookback. Also, even if you didn't have a sufficient decline in earnings, you can get approved for the employee retention credit if you were required to completely or partially suspend operations in your business 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 duration of partial or complete shutdown.
Common example, you own a restaurant, 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 services 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 exact same salaries and making more companies eligible through the 20% decline limit rather than the 50% decline limit, however the 2021 credit is also more rewarding than the 2020 credit.
Not bad, however that's absolutely nothing compared to the 2021 credit due to the fact that 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 salaries per employee ... for that whole time period? 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 worker per quarter, so we're talking about an optimum credit of $7,000 per worker per quarter. That's right, folks, the optimum 2021 employee retention credit is $28,000 per staff member.
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 also maximize your employee retention credit.
Alright, sorry for getting a little sidetracked there, I simply love 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 much easier to certify for the employee retention credit in 2021. I didn't certify for the 2020 employee retention credit initially, because I got very first round of PPP money and 2nd due to the fact that my company 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 certifies. Not only are more organizations qualified for the employee retention credit thanks to these brand-new laws, making PPP receivers qualified for the employee retention credit though not on the same earnings and making more businesses eligible through the 20% decrease limit rather than the 50% decrease limit, however the 2021 credit is likewise more rewarding 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 qualified earnings per employee paid from January 1, 2021 through December 31, 2021, limited to $10,000 in incomes per worker ... for that entire time duration?
Exactly How to Get going
That will negotiate on part of their customers to obtain the best prices feasible for their existing customers. They will investigate old billings for errors getting their clients refunds as well as tax credits.
Assistance supplied can include:
Dedicated experts that will certainly interpret highly intricate program policies and also will be offered to address your questions, including:
How does the PPP loan factor right into the ERC?
What are the differences in between the 2020 as well as 2021 programs and just how does it relate to your business?
What are gathering policies for bigger, multi-state companies, and just how do I interpret multiple states executive orders?
Exactly how do part-time, Union, as well as tipped staff members impact the amount of my reimbursements?
Thorough assessment concerning your qualification
Comprehensive analysis of your claim
Guidance on the asserting procedure and also documents
Particular program competence that a routine certified public accountant or payroll cpu might not be well-versed in
Fast and also smooth end-to-end procedure, from eligibility to claiming as well as obtaining 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 business you choose to work with will certainly determine whether your company qualifies and gets approvel for the ERC.
2. They will assess your claim and compute the maximum amount you can receive.
3. Their group guides you with the asserting process, from beginning to finish, consisting of correct documents.
Frequently Asked Questions (FAQs)
What duration does the program cover?
The program started on March 13th, 2020 as well as finishes on September 30, 2021, for qualified employers.
You can apply for refunds for 2020 and also 2021 after December 31st of this year, right into 2022 and also 2023. And possibly beyond after that too.
Many organizations have received refunds, and also others, along with reimbursements, likewise certified to continue getting ERC in every pay-roll they refine through December 31, 2021, at around 30% of their payroll cost.
Some services have actually gotten refunds from $100,000 to $6 million.
Do we still certify if we currently took the PPP?
Yes. Under the Consolidated Appropriations Act, services can now qualify for the ERC even if they already received a PPP finance. Note, though, that the ERC will just apply to salaries not used for the PPP.
Do we still certify if we did not) incur a 20% reduction in gross invoices .
A federal government authority required partial or full closure of your service during 2020 or 2021. This includes your operations being limited by business, inability to travel or restrictions of team conferences.
- Gross invoice reduction criteria is various for 2020 and 2021, yet is gauged against the present quarter as contrasted to 2019 pre-COVID quantities:
- A federal government authority required full or partial shutdown of your company during 2020 or 2021. This includes your procedures being restricted by business, lack of ability to travel or constraints of team meetings.
- Gross invoice reduction criteria is different for 2020 as well as 2021, yet is determined versus the present quarter as compared to 2019 pre-COVID amounts.
Do we still qualify if we remained open during the pandemic?
Yes. To certify, your business has to meet either one of the adhering to criteria:
- Experienced a decrease in gross invoices by 20%, or
- Needed to transform service operations due to government orders
Numerous products are thought about as changes in company operations, including shifts in task duties and also the purchase of additional safety tools.