Archives for March 2021

Thus, an eligible employer can now claim the refundable ERTC against applicable employment taxes (*) equal to 70% of the qualified wages it pays to employees in the third and fourth quarters of 2021 as well.

Mechanics of ERTC

This powerful tax credit applies to different years with different thresholds.

For 2020, if the employer had full or partial shutdown due to a government order (federal, state, or local government) or a 50% or more reduction in gross receipts, they could get up to $5k per employee in tax credits for wages paid between March 12, 2020 and before January 1, 2021. The credit can include certain health insurance payments also.

For 2021, the ERTC eligibility criteria of full or partial government ordered shutdown remains the same, but the reduction in gross receipts test has a lower threshold. If the employer is eligible for the credit based on gross receipts reduction criteria, then for the 2021 ERTC, eligible gross receipts only need to have gone down by 20%.

The tax credit is equal to 70% of the qualified wages a business pays its employees during 2021. Qualified wages are limited to $10,000 per employee per calendar quarter in 2021. Thus, the maximum ERTC amount available is $7,000 per employee per calendar quarter, for a potential total credit of $28,000 per employee in 2021! 

The credit applies to businesses with up to 500 employees. Note that this is a refundable payroll tax credit offsetting the employer’s portion of payroll taxes; if the credit exceeds payroll taxes, employers can receive a refund.  The cash for the tax credit can be applied for by reducing employment tax deposits the employer would otherwise be required to make OR by filing form 7200. If the ERTC is being applied for 2020 eligible wages, the cash can be obtained by filing amended form 941 employer’s quarterly tax returns as well. 

Mistakes businesses are making in evaluating ERTC eligibility

1. A business cannot claim the ERTC if it already claimed the PPP loan forgiveness – FALSE.  A business can claim both the ERTC and the PPP forgiveness. While a business cannot claim the same wages for both the PPP and ERTC, the business can maximize both PPP and ERTC with proper allocation of eligible wages between ERTC and PPP forgiveness.
2. A business cannot claim ERTC unless it has a 50% reduction in gross receipts – FALSE.  While one of the 2020 ERTC criteria was a 50% reduction in gross receipts, the 2021 ERTC criteria is only a 20% reduction in gross receipts compared to corresponding 2019 quarters. Even if for 2020, the gross receipts did not go down by 50%, a business may still be eligible for the ERTC due to a partial or full suspension order by federal, state, or local government or a disruption of the business. Inability to access equipment, limited capacity use, shutdown of supply chain or shut down of a supplier/vendor, reduction of business hours to accommodate sanitation – these are all situations that could qualify a business for the ERTC.  The key is a business not being able to continue operations in a manner comparable to 2019 and if that disruption resulted in a more than nominal (over 10% of gross receipts) impact on operations.       
3. A business was deemed essential and therefore does not qualify for the ERTC – FALSE.   Even if a business is deemed an essential business, it may still qualify for the ERTC if employees are unable to access a job site. For instance, if an attorney’s access to the courts was limited due the courts being ordered closed, that is an interruption of business that may qualify the business for the ERTC.
4. A business has grown during quarantine or suffered losses or does not have tax liabilities or is a nonprofit/charity, so does not qualify for the ERTC – FALSE.  The ERTC is a refundable credit and does not require for it to be profitable or to have a tax liability to ensure eligibility for the ERTC.  A business that may have grown during the quarantine or suffered losses or have no tax liabilities or be a nonprofit can still qualify for the ERTC and get cash from the government. 
5. A business with over 500 employees does not qualify for the ERTC – FALSE. The employee count is based on full-time equivalent employees (FTE), which is more involved calculation than a mere counting of heads in the office. In addition, if any employees were paid not to work or paid for hours not worked, the employee count would not take those employees into account. Businesses with employee counts well over 500 may still qualify for the ERTC because the full-time equivalent employees are 500 or less.

ERTC waiting to be tapped

With the ARPA just passed, there are several provisions that impact the ERTC for businesses that started later in 2020 and do not have a 2019 comparable period or did not suffer a decline in gross receipts. There are also provisions for a severely financially distressed business, as well as changes to the statute of limitations relating to the ERTC claims. But the one takeaway from this article should be to review, assess and reassess if your business qualifies for the ERTC. This powerful credit is essentially cash that the government wants to give to businesses if qualified.

(*) Applicable employment taxes are the employer’s share of Medicare (also called hospitalization insurance or HI) taxes (equal to 1.45% of the wages), the amount of the tax under the Railroad Retirement Tax Act payroll tax that is attributable to the employer’s HI tax rate and the employer’s share of Social Security tax (equal to 6.2% of the wages). 

About:

Samreen Sadiq is a CPA with Taksey, Neff & Associates, LLC.

BUILD AWARENESS

Small or big, all companies need a social media presence. Social platforms help you connect with your audience, increase awareness and build your brand. It is an effective way to build a following and boost leads and sales. More than 3 billion people use social media every day! it is a fun process that is worthwhile to any company.

SHOW AUTHENTICITY

Social media is how supporters know your business and brand. Many customers do a quick search via social media or your website to confirm who you are before they support your business or seek information to support you. When someone asks who you are, their question is answered often through social media. An empty storefront is not a good source of information, the same applies to social media profiles. These profiles are an opportunity to present relevant, frequently updated content to be the face of your business and your brand’s authority.

This shows that your business is trustworthy, knowledgeable and approachable.

ENCOURAGE ENGAGEMENT

Social media is the best way to get your supporters involved. Facebook and Instagram state that 98 percent of their consumers access social media on their mobile devices. Imagine your consumers have information about your business and brand at their fingertips. One day you can give your audience a behind-the-scenes tour of your office, the next feature a Question-and-Answer session with guests. They will get to know your company through engagement and will be enthused to like, share and invite others to your platform.

PROVIDE SUPPORT

Social platforms are the modern, efficient way to connect with customers. Many consumers turn to Facebook or Twitter to solve problems or find information. By being interactive, responding to your comments, questions and complaints, customers can feel heard and supported. This is another opportunity to establish your voice in the community. Be casual and funny or formal and friendly. Your followers will learn your authentic approach to their care and concerns.

About the Author

Amber Chaney is the owner of Chaney Communications (C2). We help all businesses have a strong online presence by way of branding, marketing and social media strategy. I enjoy performing arts and music.

She can be reached at https://chaneycommunications.com/

Loyalty does not happen overnight. It usually starts at the top of an organization and becomes part of the culture. When companies overlook the importance of loyalty, negativity starts and is difficult to correct.

Companies spend a lot of time trying to cultivate their brand. Clients, customers, partners, referrers and employees want to be listened to, understood and most of all, know they are valued. The trick is how do you, as a business owner, make sure this is happening.

First, think about this quote from Maya Angelou: I have learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel. This one quote is the secret to success when it comes to attracting, nurturing and retaining relationships. Enriching relationships one touchpoint at a time is the goal. Figuring out how to do this and do it well is vital to the bottom line.

Most companies don’t spend the time to figure this out. They make a sale and are off to the races fishing for their next prospect and forgetting about the people who helped along the way and that client they just did business with. Forgetting to stay in touch with those individuals who make it possible to be successful every day.

• It is not that difficult to create a plan that helps achieve this success. But you have to be intentional, and your touch-points need to be meaningful, memorable and lasting. Also, you need to build consistency into this initiative, or it will fail. Did you know:
• It costs 5 to 10 times longer to find new clients than it does to take care of the clients you already have
• The average business loses twenty percent of its customers annually by merely failing to attend to customer relations
• Eighty percent of companies say they deliver a “Superior” customer experience, yet only eight percent of their customers would agree
• Sixty-six percent of chief marketing officers say developing a deeper, richer customer experience is their top marketing priority
• More than 8 out of 10 of their executives agree that delivering a superior experience is essential to the organization’s overall success.

Taking care of those most important to you can seem daunting to many; however, building client and staff appreciation goals/objectives and developing a strategic plan are the best ways to get started. Outsourcing this project often makes sense as busy companies, leaders & employees don’t always have the time, energy, or best ideas for doing this well. The key is JOY. Joy is the emotion you are striving for; loyalty always follows.

About the Author

Becky Briggs is the owner of Our Gift Biz, a Rockville gift boutique specializing in gifts, gift baskets, gift boxes, floral design and branded items. She is a speaker, a gift expert, and entrepreneur who takes client and staff appreciation to the next level. Our Gift Biz serves clients across the U.S. with proven strategies for developing and maintaining strong relationships that build winning teams and successful businesses. In her free time, Becky enjoys cooking, gardening, traveling, spending time at the beach, and time with family and friends. Learn more at https://www.ourgiftbiz.com