Yes...What is the Employee Retention Tax Credit and how does it work?Some Great News for Entrepreneurs and Business Owners!
With the signing of the Infrastructure Financial Investment and Jobs Act Upon Nov. 15, 2021, the Employee Retention Tax Credit program end date retroactively changed to Sept. 30, 2021, for most services. Recovery Startup Businesses remain qualified to pay certified salaries through Dec. 31, 2021 to declare the credit.
On Dec. 6, the IRS issued assistance in Notice 2021-65 for employers who either received an advance ERC payment or minimized their employment tax deposits in anticipation of the credit for the fourth quarter of 2021. This assistance was necessary after the signing of the law made some companies disqualified for ERC in the fourth quarter since of the retroactive termination of the program.
This is the 3rd time this law has been modified/added to considering that ERTC was developed under the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted in April 2020. Under the American Rescue Plan Act and formerly under the Consolidated Appropriations Act, 2021, the Employee Retention Credit had actually been extended and broadened, changing the ERTC program's end date a number of times.Update
This article is the first among several we'll be providing, highlighting eligibility, qualified wages, how the credits work and more. It likewise delineates by law and date because, depending on whether you took a Paycheck Protection Program (PPP) loan and when you declare the credit, there are different requirements.
Let's begin - What is the Employee Retention Credit?
The ERTC is a refundable credit that companies can declare on certified salaries, including particular health insurance costs, paid to employees.
CARES Act of 2020
For employers who qualify, including business owners who received a loan under the initial PPP, the credit can be declared against 50 percent of qualified salaries paid, as much as $10,000 per employee every year for salaries paid in between March 13 and Dec.
Consolidated Appropriations Act of 2021
Employers who certify, including PPP recipients, can declare a credit against 70% of qualified incomes paid.
Update of Employee Retention Tax Credit:
Additionally, the quantity of salaries that can receive the credit is now up to $10,000 per worker per quarter for the first two quarters of 2021.
American Rescue Plan Act of 2021
The credit remains at 70% of qualified salaries as much as a $10,000 limit per quarter so an optimum of $7,000 per employee per quarter. So, an employer might claim $7,000 per quarter per worker or up to $21,000 for 2021 after the passage of the Infrastructure Investment and Jobs Act changed completion date of the program for a lot of services to Sept. 30, 2021. Nevertheless, Recovery Startup Businesses are still eligible for ERTC through the end of the year. A Recovery Startup Business is one that began after Feb. 15, 2020 and, in basic, had an average of $1 million or less in gross receipts.
They could be eligible to take a credit of up to $50,000 for the 3rd and 4th quarters of 2021.
Stay Tuned for the next edition as we discuss the question of which employers can qualify for the ERC (Employee Retention Tax Credit). As we can readily see, the process of determining our eligibility for the ERTC is an arduous one and full of twists, turns and opaque nuances. At ERTC Blueprint, business owners can quickly and easily discover what they qualify for through a quick and simple 10 question form, no cost, no obligation. Our CPA's are experts, working solely on helping small businesses claim what is due to them through the Employee Retention Tax Credit program from Uncle Sam.
Check out www.ERTCBlueprint.com and find out what you're owed today.driving traffic
How Do Employers Qualify for the Employee Retention Tax Credit?
Update Some Great News for Entrepreneurs and Business Owners! As we talked about in our first short article (https://mlsmarketing360.com/blog/What-is-the-Employee-Retention-Tax-Credit)
the upgraded Infrastructure Financial Investment and Jobs Act, employers have actually been offered a 'gift' from Uncle Sam with the extension of the Employee Retention Tax Credit. It can add up to numerous thousands of needed dollars to all types of business owners across America. This short article is the second among several where we'll be providing, highlighting eligibility, qualified earnings, how the credits work and more. It also marks by law and date because, depending on whether you took a Paycheck Protection Program (PPP) loan and when you declare the credit, there are different requirements. Let's start ... How Do Employers Qualify for the Employee Retention Tax Credit? A lot of employers, consisting of all types of businesses from medical establishments to hospitals, to churches to educational companies, to contractors and to nearly every restaurant and bar in the country can qualify for the ERC tax credit. Update Formerly, the Consolidated Appropriations Act expanded qualifications to allow business owners who took a loan under the Paycheck Protection Program (PPP), including borrowers from the first round of PPP who initially were ineligible to declare the tax credit.
Qualification for the Employee Retention Tax Credit is figured out by one of two aspects for qualified companies-- and among these elements needed to apply is the specific calendar quarter the company wants to make use of the credit: A business that was fully or partially shut down or needed to cut back service hours due to a federal, state or local government order. The credit applies only for the portion of the quarter that the business is suspended...It does not count the whole quarter. Some organizations, based on IRS guidance, usually do not satisfy this aspect test and therefore would not qualify. Businesses that were considered essential with some qualifications. Businesses shut down on site but still able to continue operations mostly intact via offsite telecommuting. Update Nevertheless, (Good News!) any of these businesses still might receive the credit with the 2nd element test. 2. A company that has a substantial decrease in gross invoices. 3. Recovery Startup Business American Rescue Plan Act of 2021 has added a 3rd category in which those businesses that qualify may be able to qualify for credits up to $50,000 per quarter.
Here's how a business owner, under the Employee Retention Tax Credit program can qualify as a Startup Business... Must have begun trade or business after Feb. 15, 2020 Must have less than $1MM in annual gross receipts Must not be eligible for the ERTC in either of the first two categories discussed above. IRS notice 2021-49 explained that 'Recovery Startups' can use all qualified employee wages for purposes of the credit, and different from other qualified businesses, they can qualify regardless of the number of employees. Update It should also be noted that determining if this category applies is assessed for each quarter. Again, as we've previously discussed, there are many nuances in these determinations, so be sure to employ expert advice and read the rules and regs thoroughly. IRS notice 2021-49 is very important in understanding how to apply upcoming changes to Form 941 necessary to claim the credit. Form 941-X is the form that will be used to retroactively file for the applicable quarter(s) in which the qualified wages were paid.
------------------------------------ Stay Tuned for the next edition as we discuss the question of What Kind Of Wages/Salaries Qualify for the ERC. And those that DON'T qualify. As we can readily see, the process of determining our eligibility for the ERTC is an arduous one and full of twists, turns and opaque nuances. At "ERTC Blueprint", business owners can quickly and easily discover what they qualify for through a quick and simple 10 question form, no cost, no obligation. Our CPA's are ERTC experts, focused solely on helping small businesses claim what is due to them through the Employee Retention Tax Credit program from Uncle Sam. Check out www.ERTCBlueprint.com and find out what you're owed today. Get Your Refund Estimate Here
10 Questions...A Guide to Navigating ERC Employee Retention Credit
10 Frequently Asked Questions To Help Navigate the ERC..
1. What is the ERC?Funded by the CARES Act. (Remember PPP?)It covers portions of the years 2020 and 2021.
2. What are the benefits to me as a business owner? Depending on what you qualify for, it pays up to $26,000 per employee.
3. But I already got money from the PPP program.ERC is available regardless of whether you received a PPP loan!
4. Why did my accountant/CPA not tell me about this? CPA's and accountants are busy and the ERC (Employee Retention Tax Credit) is detailed and complicated with many nuances.Be sure to ask them. They likely will suggest you consult a specialist to guide you through the approval process.A specialist can provide a very credible estimate of what you qualify for.
5. How much money can the 'average' business expect assuming it qualifies?That's a difficult question but our clients have seen an average range of $85k to $150k and even over $1MM.
6. How long will it take to get this done?After the submission of all the documents, you can expect 1 to 6 months. (It is the IRS!)7.
7. How much will this cost me? The initial analysis to determine your eligibility and approx. credit, is Free. Our fee is a percentage paid from the total credit you receive from the IRS.
8. Is there a limitation on what I can do with the credit? You can collect it as a tax credit or a cash payment and you can do as you please with the cash.
9. Do you have an example of a business that qualified? Yes, Lots of them...General contractor received $364,283.71 for Q1 of 2020, he had 59 employees.
10. How do I apply to find out if my company qualifies for the Employee Retention Tax Credit? Simple...Fill out a 10 question form to get started and we'll be in touch to discuss what else we'll need to calculate your qualifying status and credit amount.
The ERTCRecoveryTeam.com at MobileLocalSocialUSA (https://mlsmarketing360.com/blog)