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Join us February 11 for a Zoom Seminar about the Employee Retention Credit (ERC)

Since March of 2020, has your business been fully or partially suspended or limited due to a government order?

Have you suffered a decline in receipts greater than 50% for any quarter in 2020 as compared to the same quarter in 2019?

Do you anticipate suffering a decline in receipts greater than 20% for the fourth quarter of 2020, or the first or second quarters of 2021 compared to the same quarter in 2019?

If you answered “Yes.” to any of these questions, you are most likely eligible for the newly enhanced and expanded Employee Retention Credit (ERC). This credit can be extremely significant for businesses with payroll. Credits can very easily range anywhere from $5,000 to $19,000 per employee, depending on facts and circumstances. While this credit will most likely yield very large dollars, most of the attention in the newly passed Consolidated Appropriations Act 2021 (signed into law on December 27) was given to the second round of the Paycheck Protection Program (PPP). In addition, if you have eligible wages for the ERC, those wages will generally be utilized for the ERC first and not be available for the forgiveness of an existing or new PPP loan.

If you feel this applies to your business, we very strongly encourage you to join us for our next Zoom meeting where we will focus solely on explaining the details and benefits of the Employee Retention Credit. It can literally be worth thousands of dollars for you.

Please join Steve Moyer, CPA PFS CGMA CSEP and Brent Thompson, CPA CMA CGMA on Thursday, February 11, 2021, for this Zoom session from 10:30 a.m. – 11:30 a.m. They will unpack the basic rules and expansion of the credit and how it interacts with the PPP loans. You will also have the opportunity to ask questions via the Zoom chat feature.

Register today.

Registration is limited to 100 attendees and is available on a first-come, first-served basis. After registering, you will receive a confirmation email containing information about joining the meeting.

Please feel free to share this with other business owners or managers you may feel would benefit.  You do not need to be a Canon Capital client to attend. 

Important News about the Employee Retention Credit (ERC) and the PPP Loan Program

While much of the attention of the Consolidated Appropriations Act, 2021 (CAA 2021) was focused on the second draw PPP loan program, there was a small provision change that could have massive benefits for businesses that qualify. It may be easier to qualify for portions of the provision and should not be overlooked by businesses.

The Employee Retention Credit (ERC) was passed as part of the original CARES Act in March of 2020. The flagship business provision in the CARES Act was the Payroll Protection Program (PPP) loan program. The ERC was also introduced as well but was not very popular with businesses. Most businesses literally rushed out and obtained a PPP loan – and rightfully so. In almost all cases, the PPP loan was a larger dollar amount and was basically promised to be free money, if spent on approved expenses.

Here’s the important part – under the original CARES Act, if you obtained a PPP loan, the ERC was off the table altogether. You could not do both. Originally, both the PPP loan and the ERC were set to expire in 2020.

The ERC is a 50% credit on the first $10K of eligible wages per employee in 2020. To be eligible, your business had to have either a 50% reduction in gross receipts in any calendar quarter of 2020 compared to the same quarter in 2019 – OR – be shut down, or partially shut down, by a government order (federal, state, or local). But again, this was all off the table in its entirety if you took a PPP loan.

However, the CAA 2021, which was signed into law on December 27, 2020 changed everything. If businesses are eligible, they can now take BOTH the ERC and the PPP loan. Since both programs are based on payroll, the same payroll dollar cannot be used for both the credit and PPP forgiveness. We are now seeing guidance come out and define how these two programs, and the wages interact. Remember, these two programs could not interact prior to December 27, 2020.

For example, if you have 20 employees, and you qualified for the ERC in 2020 – you have the potential to receive another $100,000 ($10K qualified wages per employee X 50% credit X 20 employees) in addition to whatever PPP loans you may have or participate in going forward. But this all gets much, much, better.

The CAA 2021 also extended the ERC through June 30, 2021. In addition, the credit has been increased to 70% credit per $10K qualifying wages per employee, per quarter. Lastly, and possibly best of all, a business only has to have a reduction of gross receipts in excess of 20%, instead of the 50% needed in 2020, in either the first or second quarter of 2021 as compared to the same quarter in 2019. So yes, even if you don’t qualify in 2020 – if your business revenue remains 20% off from 2019 – you can potentially have $14,000 credits per each employee for 2021. So that business that received $100K in 2020 for 20 employees, could potentially receive another $280,000 of credits in 2021 for the same employees – again, regardless of their participation in the PPP loan.

Keep in mind, to qualify, you need the applicable reduction in gross receipts OR to be shut down, or partially shut down, by a government order (federal, state, or local). So, every restaurant, café, or eatery; every barber or hairdresser; every theater; every gym; anyone at least partially shut down as a “non-essential” business, anyone forced to operate at a percentage of capacity, would at least partially qualify.

The evaluation of the ERC MUST be calculated BEFORE you prepare your 2020 income tax return, and you CANNOT file for your PPP loan forgiveness or have it granted while you are evaluating the ERC. If you already had your PPP loan forgiven, you may not be eligible to claim any of the ERC for 2020. However, the AICPA is currently advocating to allow businesses that have already applied for PPP forgiveness to be able to claim the ERC credit as well. Please talk to your advisor first.

Lastly, there are a number of special rules for employers over 100 employees, 500 employees, seasonal businesses and businesses that started in 2019. Please talk to your advisor if you think you may be eligible for the ERC for 2020 or 2021.

While we are awaiting further guidance to be issued on this topic, we are tentatively planning a Zoom meeting for those businesses that think they qualify for the ERC. Please contact us if you would like to receive updates about future Zoom meetings or if you have questions.

Seminar Recording: Unpacking the Latest COVID-19 Relief Package

We held a virtual seminar on January 12, 2021 to unpack the pertinent elements of the latest COVID-19 Relief package: “Paycheck Protection Program 2 and the Consolidated Appropriations Act, 2021.” Presented by Steve Moyer, CPA PFS CGMA CSEP and Brent Thompson, CPA CMA CGMA, highlights included a review of:
  • Business Provisions
    • Loan Forgiveness and Forgiveness Applications for PPP1
    • New Second Round of PPP Funding (PPP2)
    • Changes in Employer Credit for Paid Family and Medical Leave
    • Changes to the Deferred Payroll Tax Rules
    • Changes to and Expansion of the Employer Retention Credit
    • Changes to Meal Deductions
  • Individual Provisions
    • Second Round of Economic Impact Payments
    • Changes to Child Tax Credit and Earned Income Credit Rules
    • Changes to Certain Contribution Rules
    • Temporary Changes for Health and Dependent Care Flexible Spending Accounts (FSA)
  • Numerous Disaster Relief Provisions, Energy-Related Provisions, Pension and Health Provisions and more.
Here is a summary of the legislation from AICPA. Watch the recording of the seminar and access a PDF file of the presentation. If you have any questions, please contact us via phone at 215-723-4881 or via email.

Zoom Meeting on January 12, 2021 to Unpack the Latest COVID-19 Relief Law

On December 27th, President Trump signed into law the second-longest piece of legislation in U.S. history. Needless to say, there are countless provisions in this law that affect businesses and individuals alike – including the second round of PPP funding.

Please join Steve Moyer, CPA PFS CGMA CSEP and Brent Thompson, CPA CMA CGMA on Tuesday January 12, 2021, for a Zoom session from 10:30 a.m. – 12:00 p.m. They will start to unpack the 5,593 pages of legislation and discuss the topics that have the largest and most immediate impact on you and your business. There will be an opportunity to ask questions via the Zoom chat feature.

Highlights of the law include the following:

Business Provisions

  • Loan Forgiveness and Forgiveness Applications for PPP1
  • New Second Round of PPP Funding (PPP2)
  • Changes in Employer Credit for Paid Family and Medical Leave
  • Changes to the Deferred Payroll Tax Rules
  • Changes and Expansion of the Employer Retention Credit
  • Changes to Meal Deductions

Individual Provisions

  • Second round of Economic Impact Payments
  • Changes to Child Tax Credit and Earned Income Credit Rules
  • Changes to Certain Contribution Rules
  • Temporary Changes for Health and Dependent Care Flexible Spending Accounts (FSA)

Numerous Disaster Relief Provisions, Energy-Related Provisions, Pension and Health Provisions and More

Register here. Registration is limited to 100 attendees and is available on a first-come, first-served basis. After registering, you will receive a confirmation email containing information about joining the meeting.

Please feel free to share this invitation with other business owners or managers you may feel would benefit.  You do not need to be a Canon Capital client to attend.

 

A Summary of the COVID-19 Relief Bill Passed by House and Senate Last Night, December 21, 2020

Late in the evening on Monday, December 21, 2020, the House and Senate passed a massive 5,593 page COVID-19 Relief and Government spending Bill. The President is expected to sign it into law today. The bill is a combination giant year-end government spending bill and a COVID-19 relief package combining $900 billion in COVID-19 relief aid with $1.4 trillion in regular government funding and a bevy of tax breaks for businesses. This pandemic relief bill is the second largest bill in history, only to be surpassed by the virus relief package signed into law just nine months ago.

The following is a brief summary of some of the major provisions of the new pandemic relief bill. A more detailed summary can be found here.

  • The legislation would provide direct payments of $600 to most Americans and their children. This would be for those individuals making up to $75,000 and $1,200 for married couples earning up to $150,000 as well as $600 per child. There will be a phase out for those individuals and families earning more than those amounts. The payments will go out as soon as next week, Treasury Secretary Steven Mnuchin said Monday.
  • For the unemployed, a $300-per-week in enhanced unemployment benefits will be put in effect through March. Unemployment insurance programs for gig workers and the long-term unemployed also would be extended.  Pandemic Emergency Unemployment Compensation, which provided up to 13 additional weeks of jobless benefits to those who had exhausted their regular state benefits, was extended as well.
  • Businesses who previously received PPP loans, will be able to deduct expenses related to these loan proceeds.
  • A second round of PPP loans (for now called PPP 2) will be available to businesses beginning in early January 2021.  These loans will be available to businesses who didn’t receive them under the first round or for businesses who received first round loans, but had a reduction of revenue in 2020 related to the Covid pandemic.
  • Simplified loan forgiveness for PPP loans under $150,000.
  • The measure contains $25 billion for emergency rental assistance, and it extends the Cares Act’s eviction moratorium until Jan. 31.
  •  It also has $82 billion for education funding, as well as $10 billion to support childcare providers, $15 billion for entertainment venues and $13 billion for nutrition assistance.
  • Additional measures include certain tax breaks and tax extenders for expiring tax provisions.

We will keep you up to date as additional information becomes available. We will look to offer some Zoom webinars in early to mid-January, 2021,  so be on the look-out for additional information.  If you have specific questions related to your own situation, please feel free to reach out to us via email or phone at 215-723-4881

Seminar Recording: Year-end Planning for a Biden Administration and the SECURE Act

2020 saw a lot of tax law changes due to COVID-19. We expect the same in 2021 with the continuing pandemic and a probable change in Administrations. Are you prepared?

On Friday, December 18, 2020, Chuck Porter, Jr., AIF, CFMFO and Brent Thompson, CPA CMA CGMA presented a virtual seminar to help in your planning. Topics included:

  • Review of the potential Biden tax plan
  • Review of the SECURE Act and other recent tax law changes
  • Planning points to evaluate prior to the end of the year
  • A brief update on PPP loan forgiveness and related recent and pending legislation

Watch the recording of the seminar and access a PDF file of the presentation.

If you have any questions, please contact us online or via phone at 215-723-4881. We will continue to issues these updates as information becomes available.

Year-end Planning for a Biden Administration and the SECURE Act: Zoom Seminar December 18, 2020

2020 saw a lot of tax law changes due to COVID-19. We expect the same in 2021 with the continuing pandemic and a probable change in Administrations.  Are you prepared?

Join Chuck Porter, Jr., AIF, CFMFO and Brent Thompson, CPA CMA CGMA on Friday, December 18, 2020, for a Zoom session from 10:00 a.m. – 11:30 a.m. They will provide you with valuable information as well as the opportunity to ask questions via the Zoom chat feature. This virtual seminar is ideal for business owners and high net worth individuals alike.

Topics will include:

  • Review of the potential Biden tax plan
  • Review of the SECURE Act and other recent tax law changes
  • Planning points to evaluate prior to the end of the year
  • Brief update on PPP loan forgiveness and related recent and pending legislation

Registration is limited to 100 attendees and is available on a first-come, first-served basis. After registering, you will receive a confirmation email containing information about joining the meeting. Please feel free to share with friends and colleagues you feel will benefit from this information.

Register here.

Operating Procedures under the Latest COVID-19 Guidance

Under the latest Pennsylvania COVID-19 guidance issued on Monday, November 23, 2020, the majority of our staff will be working remotely until further notice. As always, we can be reached by phone (215-723-4881) or email.

Reception will be open from Noon – 2 p.m. each day for client pick-ups. Outside of that timeframe, pick-ups will be by appointment only. Our drop box is available at all times for delivering information to us.

Thank you for continuing to work with us as we all hope for better things in the new year.