‌
Nothing Better to Do?
Read our Eblasts Before Bed
(Guaranteed to help you sleep! Wish we could say the same thing).
Today, we would like to discuss payroll credits (AGAIN) and make sure that two of them are on your radar right now.  
The first is through FFCRA (Families First Coronavirus Response Act). Many of your payroll companies have contacted you about this recently. Basically, if you have an employee out due to being quarantined while testing, because they have the virus or out because of school or day care closures, the FFCRA pays for wages for a staff member through September 30, 2021. Please call your payroll company to discuss this credit as the situation comes up between January 1 and September 30 (2021).
ERC for 2021:
 
  • If you did NOT receive the PPP2 AND
  • Your collections/income were down 20% or more in the first quarter 2021 (vs 1st quarter 2019).
  • Contact your payroll company as soon as possible. 
  • Your payroll company should be able to file your Form 941 without amending it and you will get your credit quickly. If they have to amend it, it will take months to get your credit so this should be a priority.

HOWEVER...

  • If you did receive the PPP2 AND
  • Your collections/income were down 20% or more in the first quarter 2021 (vs 1st quarter 2019)
  • No action is required now. You will wait until your PPP(2) period is completed.

To calculate if you are down 20%, you must report any other income as part of the calculation. This would include interest income for the quarter or any other weird income your might have received. Again, this is a comparison between 2021 first quarter and 2019 first quarter. If you need help calculating it, please let us know. 
ERC for 2020:
 
  • If you qualify for the 2020 ERC AND
  • You received a PPP(1) loan AND
  • PPP(1) has not been forgiven
  • It is best to optimize the allocation of wages to receive the highest credit.
  • It would be beneficial for you to allow us to calculate the optimum credit for you. Your payroll company does not have the information needed to maximize the credit (you could lose out). 

Back to the ERC for 2020 Part 2:
 
  • If you qualify for the 2020 ERC AND
  • You did NOT receive a PPP(1) loan
  • Please contact your payroll company and let them calculate the ERC.
  • They will amend your 2020 Form 941. 
  • Please notify us immediately if you are going this route as we will need the amended payroll information for your 2020 business returns and your 2020 individual returns (we are talking extensions for personal, too).
Please note: This credit involves an amended Form 941 and this will take many months to receive money for the credit (seasons may come, seasons may go). The government (according to a rumor we have heard and believe) is backed up processing amended returns by 6 to 9 months. 

Happy reading and nighty night.