Article

More Tax Changes - Employee Retention Credit no longer "irrelevant"

February 25, 2021 

 

Provided by Bryan Koshers, CPA Bryan@KoshersCo.com of Koshers & Company, LLC.  Thank you to Bryan for providing for our education.  Please contact Bryan directly with any questions, as his firm is not related to K&K in any capacity (and we do not confirm or endorse the advice provided below).  

The Government is at it again, making changes after the fact.  Once we feel comfortable with a new tax rule they go ahead and make changes.
 
This change comes in the way of credits from employee payroll costs.  Previously, one could not take part in the Employee Retention Credit (ERC) if they received a PPP loan.  As of the last week in December, that rule was changed.  The ERC rules are different by year, here are the parameters;
 
For 2020 Qualifications are:
 

  1. Your gross receipts from a calendar quarter in 2020 as compared to that same calendar quarter in 2019 (not including PPP or EIDL) were down by 50% or more
  2. If you were not down by 50% or more then your work was partially or fully suspended by government order
  3. None of the payroll costs used to support the ERC claim can be used to justify your PPP forgiveness

  
For 2021 Qualifications are:

 

  1. Your gross receipts from a calendar quarter in 2021 as compared to that same calendar quarter in 2019 (not including PPP or EIDL) were down by 20% or more
  2. If you were not down by 20% or more then your work was partially or fully suspended by government order
  3. None of the payroll costs used to support the ERC claim can be used to justify your PPP forgiveness

  
How do I apply for these credits?

 

  1. Once you determine if you do qualify then tally the wages paid by person during that period.  For example, if you received your PPP loan on May 1, 2020 then assuming your income was down and you were ordered closed, only the payroll in the April 1, 2020 – April 30, 2020 period would qualify
  2. For costs in the 2020 year, please discuss this with your payroll service so that they can amend the applicable quarterly payroll tax returns and obtain your credit
  3. For costs in Q1 2021, you need to reach out to your payroll service to alert them NOT to file your payroll returns until you provide them with the ERC information
  4. You may need to reach out to us as well to provide either gross receipts figures or profit loss reports to justify your claim

 
Be prepared for the payroll services to charge fees for these amended returns so please understand the value before you go this route.
 
Here is a link with more information if interested;

https://www.investopedia.com/what-is-the-employee-retention-credit-and-how-to-get-it-4802575
 
Hope you are well and let me know if you have any questions.
 
Bryan Koshers, CPA
Koshers & Company, LLC
1094 Merrick Avenue
Merrick, NY 11566
(516) 481-1515 voice
(516) 481-1784 fax

Bryan@KoshersCo.com
KoshersCo.com
 

 

Looking for the KK Healthcare Exchange?  Click Here. 

MISSED OUR RECENT WEBINARS?  CLICK HERE ANYTIME!
Looking for HIPAA and compliance forms?  
Click here to visit our website.
Have a question or comment for Jennifer?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or  at (516) 747-6700 x. 302.
Interested in having Jennifer speak at an event or
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com
Click here to learn about
K&K's Prepaid Legal Audit/Investigation Defense Now!
More Tax Changes - Employee Retention Credit no longer "irrelevant"-February 25, 2021-Jennifer Kirschenbaum

Article

More Tax Changes - Employee Retention Credit no longer "irrelevant"

February 25, 2021 

 

Provided by Bryan Koshers, CPA Bryan@KoshersCo.com of Koshers & Company, LLC.  Thank you to Bryan for providing for our education.  Please contact Bryan directly with any questions, as his firm is not related to K&K in any capacity (and we do not confirm or endorse the advice provided below).  

The Government is at it again, making changes after the fact.  Once we feel comfortable with a new tax rule they go ahead and make changes.
 
This change comes in the way of credits from employee payroll costs.  Previously, one could not take part in the Employee Retention Credit (ERC) if they received a PPP loan.  As of the last week in December, that rule was changed.  The ERC rules are different by year, here are the parameters;
 
For 2020 Qualifications are:
 

  1. Your gross receipts from a calendar quarter in 2020 as compared to that same calendar quarter in 2019 (not including PPP or EIDL) were down by 50% or more
  2. If you were not down by 50% or more then your work was partially or fully suspended by government order
  3. None of the payroll costs used to support the ERC claim can be used to justify your PPP forgiveness

  
For 2021 Qualifications are:

 

  1. Your gross receipts from a calendar quarter in 2021 as compared to that same calendar quarter in 2019 (not including PPP or EIDL) were down by 20% or more
  2. If you were not down by 20% or more then your work was partially or fully suspended by government order
  3. None of the payroll costs used to support the ERC claim can be used to justify your PPP forgiveness

  
How do I apply for these credits?

 

  1. Once you determine if you do qualify then tally the wages paid by person during that period.  For example, if you received your PPP loan on May 1, 2020 then assuming your income was down and you were ordered closed, only the payroll in the April 1, 2020 – April 30, 2020 period would qualify
  2. For costs in the 2020 year, please discuss this with your payroll service so that they can amend the applicable quarterly payroll tax returns and obtain your credit
  3. For costs in Q1 2021, you need to reach out to your payroll service to alert them NOT to file your payroll returns until you provide them with the ERC information
  4. You may need to reach out to us as well to provide either gross receipts figures or profit loss reports to justify your claim

 
Be prepared for the payroll services to charge fees for these amended returns so please understand the value before you go this route.
 
Here is a link with more information if interested;

https://www.investopedia.com/what-is-the-employee-retention-credit-and-how-to-get-it-4802575
 
Hope you are well and let me know if you have any questions.
 
Bryan Koshers, CPA
Koshers & Company, LLC
1094 Merrick Avenue
Merrick, NY 11566
(516) 481-1515 voice
(516) 481-1784 fax

Bryan@KoshersCo.com
KoshersCo.com
 

 

Looking for the KK Healthcare Exchange?  Click Here. 

MISSED OUR RECENT WEBINARS?  CLICK HERE ANYTIME!
Looking for HIPAA and compliance forms?  
Click here to visit our website.
Have a question or comment for Jennifer?
Contact Jennifer at Jennifer@Kirschenbaumesq.com or  at (516) 747-6700 x. 302.
Interested in having Jennifer speak at an event or
at a residency/fellowship program?
Contact Jennifer directly at (516) 747-6700 x. 302 or at Jennifer@Kirschenbaumesq.com
Click here to learn about
K&K's Prepaid Legal Audit/Investigation Defense Now!