The Coronavirus Aid, Relief and Economic Security Act (also known as the CARES) was signed into law on March 27 2020. It included two programs to assist businesses with keeping workers employed: The Payroll Protection Program administered by Small Business Adminstration agency (“PPP”)and Employee Retention Tax Credit(ERTC).

The PPP is a great way to give your business an influx of cash without having any tax liability. The payroll covered by this program doesn’t even appear on the books, so you can deduct it from what would have been paid out as regular wages!

The ERTC tax credit, which stands for Employer Responsibility Tax Credit can be a great incentive to hire individuals with disabilities. Eligible employees receive up tp $7000 in each quarter that they qualify and there are specific rules about what counts as qualified wages by employee status or whether an individual has used all their allowed credits within one year before another season begins again!

The CARES Act initially gave employers the option to apply for either PPP or ERTC credits, but not both. For most businesses this meant that they would receive a forgivable loan through their employer’s payroll system under 500 employees in order to make it easier on them while still providing incentives for working hard and achieving goals within your company!

The American Rescue Plan Act of 2021 is a law that includes many modifications and expansions to existing elements from previous stimulus programs.

Noteworthy modifications for business owners included:

Businesses who applied for and received PPP funds could now also claim ERTC credits.
ERTC credits could be retroactively claimed for businesses that qualified in 2020.
ERTC credits were extended through 9/30/21 with lower qualification requirements.
The per-employee cap on qualifying wages increased from $10,000 for all of 2020 to $10,000 per quarter for the first 3 quarters of 2021.
The refundable credit amount increased from 50% of qualifying wages in 2020 to 70% in 2021.
So the short answer is “Yes” . . . you can claim ERTC even if you received PPP funds.

The Employee Retention Tax Credits are a new type of tax credit that can be just as effective at retaining your employees and boosting morale in the workplace. Unlike payroll protection programs, there is no “application process” for this credits; you simply claim it like any other valuable asset – by affirmatively stating to IRS how much money has been invested into workers’ wages so they don’t leave because their employment benefits improve elsewhere.

When you claim a child tax credit, you do so by asserting this fact on your Form 1040 Personal Income Tax Return.

The difference is that when you claim an ERTC tax credit, you do so on your Form 941 Employer Quarterly Tax Filing.

With the recent changes in tax laws, you may be able to reduce your current quarter’s contribution and request a refund of excess credits. You can also take advantage if expectant parents who are claiming Childcare Credit or Work Opportunity Tax credit by filing an amended form (the Form 941-X) with their employer during any three consecutive months prior starting January 1 st .

While it may seem like business is back to normal, there are still some items you want to consider before claiming this ERTC assessment. First off all of your 2020 eligibility criteria was based on revenue declines from 2019 or if the company had been partially closed due government mandate – so make sure that doesn’t happen again!

Revenue may have returned to “normal,” but you still need those credits. The eligibility criteria in 2020 was based on revenue decreases from 2019 or if your business was partially closed due government mandate.

Second, while your revenue may have returned to “normal” in Q1 2021, remember that we are comparing your Q1 2021 to Q1 2019. If 2019 was a year of growth for your business, then your revenue levels 2 years ago may have been much less than Q1 2020.

And lastly, if your revenues were down in Q4 2020 by just 20% compared to Q4 2019, then you may also be eligible for Q1 2021. There is a safe harbor provision that few advisors are talking about, and it means that many businesses are qualifying for $7,000 per employee in Q1 2021.

The government is looking for ways to motivate and reward you if, as a business owner or property manager-in any capacity -you are trying your best not only keep American residents employed but also pour money straight into our economy’s rebuilding efforts.

You may be referring to the CARES Act, which allows employers a deferral of taxes owed on Social Security. The repayments are due by December 31st each year with at least 50% being paid back then and any remaining amount must also occur in that same time period or next financial year (starting January 1). These ERTC credits do NOT act like traditional deferrals because they’re only given when you’ve actually PAID wages instead; this means if your boss pays out $1K per month but doesn’t withhold enough money for employment services.

These credits can offset future tax contributions or you can receive a refund check – it’s your choice.

And you will NOT have to re-pay these funds (unless, of course, you don’t provide adequate documentation in the course of an audit).

The PPP loans are an excellent opportunity for people who need funds quickly and don’t want the hassle of getting a traditional loan. Your banker, CPA or Financial Advisor was probably very helpful when it came to signing you up because they were effectively guaranteeing that all documentation is correct through their participation in this program – so there’s no worries about being left high-and-dry.

It is no wonder that your financial advisors were so helpful when it came time to get the PPP loan. They knew they would be earning a commission from fees charged by banks just like yours, which made them even more inclined towards educating you on how this program works and getting all of those pesky papers signed!

The employment tax compliance for small businesses can be quite overwhelming. This is why it’s important to have an expert on your side who will not only take care of all those tedious details but also make sure you stay in the clear!

From the conversations we’ve had with bankers, they have no interest in involving themselves in your employment tax compliance. For them it is a liability and beyond their scope of services.

What a tangled web of paperwork and requirements you have to maintain just as an employer! Payroll Services does such excellent work on payroll, but when it comes down to ERTC credits they’re not available. They say that all this is too complicated for them because there are so many variables involved in computing your employee’s wages . . . including annual qualifying wage gaps and quarterly reports from employers who need their own information compiled about eligible staff members’ contributions towards P&L forgiveness programs like tuition reimbursement or paying off student loans early – things I never would’ve thought of.

Your Payroll Service does a great job at executing the fundamentals of paying your employees, but computing ERTC credits requires visibility into profits and losses. Not only that–you need to be aware how eligibility is determined as well as allocating those finite resources among different types or workers in order for it make sense accounting-wise! It sounds like what you really want done isn’t just payroll services but also tax preparation so don’t settle when someone offers “only” one thing anymore because they might end up offering less than expected.

The Payroll Services that we’ve worked with so far are happy to provide the payroll registers that we need to perform the allocations. And they are happy to file the Amended Form 941-X with the IRS on our client’s behalf.

But that’s the extent of it.

In fact, most wise Payroll Services are asking clients to sign an indemnification waiver before submitting a Form 941-X because the Payroll Service can take no responsibility for the accuracy of the ERTC credits you are claiming.

For them to involve themselves in the intricacies of this calculation, it is a liability and beyond their scope of services.

The complexity of the ERTC program is a beast unto itself and every tax accountant we’ve talked to says they focus on staying up-to-date with ever changing federal rules.
The one thing that has become clear though, even for those who specialize in just income taxes or only payroll management – some accountants will prepare your returns regardless but won’t give you any advice about how best use these credits if it goes against what’s already been done before!

The complexity of the ERTC program is a beast unto itself and every tax accountant we’ve talked to has said they focus on staying up-to-date on the ever-evolving income tax code, and they can’t now become experts in the ERTC program as well.

If your tax accountant is comfortable determining your eligibility by quarter and year, computing your credits, and preparing contemporaneous documentation to support an IRS audit, then you should certainly let them handle all of this.

If you want a second set of eyes on this, we’re happy to take a look.