How to Calculate your Qualified Wages for Employee Retention Credit for 2020
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- เผยแพร่เมื่อ 11 ม.ค. 2021
- Did you receive the Paycheck Protection Program back in 2020? Under the old law, you couldn't get a PPP loan and receive the Employee Retention Credit (ERC). However, under the Consolidated Appropriations Act of 2021, now you can. Larry Gray, CPA walks through exactly how this works and how to find your qualified wages to get the payroll credit.
This is also for you if you didn't know about the ERC and now want to go back and get credit for your wages paid in 2020.
We are waiting for guidance from the IRS on how to report these hours but until then you can prepare by getting your qualified wages calculated!
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Check our ERC under the CARES ACT video below:
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Can't wait until you post the follow up.... about how to amend my payroll numbers for 2020. Thanks!
Thank you so much for this video! I am a visual person and your timeline sheet helped me understand tremendously!
so glad this helped!
I have watched all the ERC videos from AGC Solutions. I so appreciate the thorough and detailed explanations of how the ERC works and will stay tuned on how to actually claim the credit. I have talked to my payroll processor about adding ERC to 4Q 2020 Form 941 and am getting blank stares. In the next video, can you cover how to properly fill out Form 941 or amend it if the payroll processor won't?
Thanks!
Great video. Have we gotten the 941x guidance on how to complete the form?
Please do a video on Worksheet 1 and nonrefundable amounts of ERC so I can fill out the 941 correctly. Thanks.
please see our worksheet 1 video here: th-cam.com/video/tw-gWg82D2M/w-d-xo.html
Thank you for this video. Do businesses such as child care providers deemed 'Essential' but were ordered to partially shut down qualify for the ERTC?
My biggest question with the employee retention credit is about the 50% loss. I read somewhere that you have to show a 50% loss for qualified wages under the retention credit.
Thanks for your work & time.
From the IRS website to qualify for the ERC other than a 50% revenue reduction it states: 'the full or partial suspension of the operation of their trade or business during any calendar quarter because of governmental orders limiting commerce, travel, or group meetings due to COVID-19'
I find this statement somewhat ambiguous. Not sure what 'the full or partial suspension of the operation of their trade or business' means? does a reduction in business qualify as a partial suspension? Anyone care to comment on that?
Our business was forced to close in late March, we only met the decrease in gross receipts qualification for 2nd Quarter 2020. But since we were forced to close are there any available wages we can claim the ERTC on for 2020 1st quarter? Thanks
How do you go back to March 13-31, 2020 and collect the ERC in 2021. Do you have file an ammended 941X form? Thanks!
I have the same question. From other sites it seems we amend the 1st quarter with 941X for 2020. In reasons we are amending I found to enter
The enactment of the Consolidated Appropriations Act, 2021
Section 206(c) which provides that employers that received PPP loans can now qualify for the ERC with respect to wages that are not paid for with proceeds from a forgiven PPP loan.
If I am incorrect please clarify what to amend. Thanks
@@markschurman5213 as per my accountant file the 941X and state reason CAA 2021
Hello. Pls. correct me in my understanding. Does this mean I can apply for ERTC if my business was closed due to govt shutdown and no employees/wages were paid on March and you do no have PPP on that period .
I read that wages of family/relatives of owners are ineligible for the ERC credits?
I am an employee of the business for over 20 years, and have been general manager for over 10 years. I am the son of the 100% shareholder owner. At this very moment, I am not a shareholder of the corporation. It is a small corp, 4 employees, S-Corp election.
So, if we end up with 20% drop in gross receipts in, say, Q1 2021, compared to Q1 2019, my wages would not be eligible for the ERC credits? Because I am the son of the owner, although a legitimate employee?
If so - He wants to make me majority shareholder anyway, so should we put a rush on that, just in case our revenues are down 20%? He takes very little pay from the company these days, compared to me, due to his less involvement.
Is the EDIL an issue? Can s-corporation, one owner who collects wages, no other employees qualify for this credit if he/she has 50% reduction in gross receipts (deposits?)
No..must be less than 50% owner to qualify.
I received my PPP on May 5. Can i use qualified wages from Mar 13 - Apr 30 or does it go by quarters and I can only use Mar 13 - Mar 31?
Either a 50% loss -OR- "Fully or partially suspend operation during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19." Some are now saying the "partially suspended" part could mean any area in which businesses were required to limit service (like having a capacity restriction in the seating area of a restaurant per County/State proclamation). So, if you are going for "suspension", you'll need to know when your jurisdiction fell under a restriction. Hopefully the IRS will give better info soon.
Is it true owner employee's wages of an s corp are not eligible for erc?
I'm also interested in this. I've read conflicting opinions from CPAs on this. One CPA even said a state sponsored CPE program specifically said S-Corp owner and Spouse are eligible, but no other related parties in the list on question 59 of the ERC IRS FAQs.
Yep . This is really confusing . We have a Corp owners with only themselves on payroll. Are they eligible ?
Do you offer your services to file for my business
I’m in cellphone business 2019 we use to sell less expensive devices so we sell more expensive devices 2021 so we didn’t qualify we checked with our sales tax report also didn’t qualify for ppp 2019 gross taxable receipts 70k as a business and 2021 $109k 🥲
This is why I got my CPA License? People here in Hawaii pull up in their new SUVs with 10 kids in tow to get free food.....Moreover, there are help wanted signs all over the Hawaiian Islands.....Everyone is surfing since the federal government social system pays their bills. Go figure. Americans need a Vacation in Cambodia at the Hilton Hotel, Song by the dead kennedys in the 70s.
I would like your explanations must be with numbers and examples.
God bless the Federal Government deficit spending and politics....... :) CPAs just love to work with clients in North America that can not save, control overhead and hover over spoiled brats LOL :)
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