What is the Employee Retention Credit for Businesses in Coral Springs, FL?

The employee retention credit is a valuable tax credit available to eligible employers in Coral Springs, FL to help retain employees during COVID-19. It was authorized by the CARES Act in March 2020 and provides a credit of up to $7,000 per employee for qualified wages paid in 2021.

To qualify for this credit in Coral Springs, an employer must have experienced either:

  • A full or partial suspension of operations due to a COVID-19 government order
  • A significant decline in gross receipts compared to the same quarter in 2019

For employers with 100 or fewer employees, all wages paid qualify for the credit. For larger employers, it is limited to wages paid to employees not providing services.

This credit can be taken against the employer’s share of Social Security taxes owed on employee wages each quarter. If it exceeds taxes owed, the excess is refunded to the employer.

The credit has been a vital lifeline for Coral Springs businesses impacted by COVID-19 disruptions and labor shortages. Consulting a local tax professional can help employers maximize the credit before it expires on December 31, 2021.

What are the Eligibility Requirements for the Employee Retention Credit in Coral Springs, FL?

To qualify for the valuable employee retention tax credit in Coral Springs, FL, employers must meet certain eligibility requirements based on COVID-19 impacts on their business operations and revenue:

  • The employer must have experienced either a full or partial suspension of operations due to a government order limiting commerce, travel, or group meetings. This includes businesses that closed due to COVID-19.
  • Or, the employer must have experienced a significant decline in gross receipts, with gross receipts falling by more than 20% when compared quarter-over-quarter to 2019.
  • To be eligible based on the decline in gross receipts standard, the employer must have had gross receipts under 50% of what they were in the same quarter of 2019.
  • For employers that were not in business during 2019, their 2021 quarterly gross receipts can be compared to 2020 instead.
  • The employer must have employees for whom they paid qualified wages during the quarters impacted by COVID-19.
  • Certain aggregation rules apply for companies that are part of larger controlled groups or affiliated services groups.

Meeting these criteria qualifies Coral Springs employers to claim the credit for retained employees based on COVID-19 disruptions.

How Much is the Employee Retention Credit Worth for Employers in Coral Springs, FL?

For employers located in Coral Springs, FL, the employee retention tax credit is worth up to $7,000 per employee for 2021. Here are some key details:

  • It equals 70% of qualified wages paid to an employee during a quarter in 2021.
  • Qualified wages are capped at $10,000 per employee for each quarter.
  • So the maximum credit per employee for Q1 or Q2 of 2021 is $7,000.
  • The total for the full year 2021 cannot exceed $21,000 per employee.
  • For smaller Coral Springs employers with less than 500 employees, qualified wages are the total regular wages paid to an employee during the quarter.
  • For larger employers, it is for wages paid to employees not providing services only.
  • The credit is claimed against the employer’s share of Social Security taxes owed for the quarter.
  • Any excess credit beyond the employer’s Social Security tax liability is refunded as an overpayment.

This means the employee retention credit is worth up to $7,000 per employee per quarter in 2021 for eligible Coral Springs employers. Properly documenting qualified wages paid will maximize the value of this credit for local businesses impacted by COVID-19.

How can Businesses in Coral Springs, FL Claim the Employee Retention Credit?

Businesses located in Coral Springs, FL can claim the employee retention tax credit and get refunds by following these key steps:

  • Review eligibility criteria to qualify based on COVID-19 impacts on your operations and gross receipts. Document evidence to support meeting the requirements.
  • Calculate qualified wages paid to each employee for each quarter you claim the credit. Follow the wage limits based on business size.
  • Report your employee retention credit on Form 941, line 11c for each quarter you claim the credit. This is submitted along with your regular employment tax filings.
  • If your total retention credits exceed your payroll tax liabilities for a quarter, the IRS will refund the excess to you as an overpayment.
  • Consider filing Form 7200 to request advance payment of the expected credit amounts before you file your Form 941.
  • If you already filed Form 941 for a quarter without claiming the credit, file an amended return such as Form 941-X to claim it retroactively.
  • Maintain detailed wage payment records per employee per quarter to support credit amounts.

Consult a local Coral Springs tax professional to ensure you properly claim and receive the maximum employee retention credit refunds your business qualifies for.

Can Non-Profit Organizations in Coral Springs, FL Qualify for the Employee Retention Credit?

Yes, tax-exempt organizations located in Coral Springs, FL can qualify for the refundable employee retention tax credit just like for-profit businesses. Non-profit employers in Coral Springs should follow these guidelines:

  • Review eligibility based on full or partial shutdowns due to COVID-19 orders or significant revenue declines compared to 2019 quarters.
  • Calculate qualified wages paid to employees for quarters impacted by COVID-19 effects. Follow limits based on an average number of employees.
  • As a tax-exempt employer, you cannot claim the credit on Form 941. Instead, file Form 990-T to report any unrelated business income, and claim the credit there.
  • If you did not owe any employer payroll taxes and have no unrelated business income, you can file Form 8849 to request a refund of your employee retention credits.
  • File an amended Form 990-T or Form 8849 to claim any retroactive credits from prior quarters if eligible.
  • Maintain detailed wage payment records to support your qualified wage amounts per employee per quarter.
  • Take advantage of the credit before it expires on December 31, 2021.

Properly claiming the credit can help Coral Springs non-profits retain employees through COVID-19 impacts. Work with a tax professional to ensure you receive all the tax credits your organization qualifies for.

When does the Employee Retention Credit Expire for Companies in Coral Springs, FL?

Unfortunately for employers located in Coral Springs, FL, the employee retention tax credit is currently set to expire on December 31, 2021, based on current laws.

Key facts about the credit’s looming expiration:

  • It was originally supposed to expire on December 31, 2020, but was extended through 2021.
  • Employers in Coral Springs cannot claim the credit for Q1 2022 and beyond without further legislative action.
  • Retroactive claims can still be filed for prior quarters in 2021 and 2020 if eligible.
  • The credit has already been reduced once before – maximum amounts per employee decreased from 2021 to 2020.
  • Opportunities may exist to extend it again or implement similar future credits.
  • But for now, the credit cannot be claimed for qualified wages paid in 2022 in Coral Springs.
  • Employers should claim all eligible amounts for 2021 before the credit goes away.

While disappointing for struggling employers, it is important to consult experts and maximize benefits from the employee retention credit in 2021 before it disappears. Planning for the expiration will optimize savings for Coral Springs businesses impacted by the pandemic.

Can employers in Coral Springs, FL claim the credit retroactively?

Employers in Coral Springs, FL can claim the employee retention tax credit retroactively if they qualify based on prior COVID-19 impacts. Two options exist to claim the credit for previous quarters:

File Amended Returns: Form 941-X can be filed to claim credits for quarters in 2020 and 2021 where you had eligible wages but did not claim the credit on original filings. Retroactive eligibility is based on shutdowns and gross receipt declines.

Claim on Next Return: Even beyond normal time limits, you can claim credits for prior quarters on your Form 941 for the immediate next quarter still open. Get the remaining amounts on the next eligible return you file.

Key considerations for Coral Springs businesses:

  • Interest will accrue on any overpayments from the original return’s due date. File promptly.
  • Late payment penalties won’t apply if credits cover taxes previously owed.
  • Maintain detailed employee wage payment documentation by quarter to calculate credits accurately.
  • Work with a tax pro to ensure proper amended return filings and credit calculations.
  • Take action before expiration time limits pass for older quarters.
  • File by December 31, 2021, for any remaining 2021 credits.

Properly filing amended or future returns will allow Coral Springs employers to rectify missed employee retention credits from prior pandemic quarters if eligible.

Are There IRS Forms Business Owners in Coral Springs, FL Need to Claim the Credit?

To properly claim the employee retention tax credit, businesses located in Coral Springs, FL will need to complete the following IRS forms:

  • Form 941 – This standard quarterly payroll tax return is used to report total retention credit amounts earned each quarter along with payroll tax liabilities. Credits are claimed on line 11c.
  • Form 7200 – Employers can proactively file this form to request advance payment of anticipated retention credits for a quarter before filing Form 941.
  • Form 941-X – If amending to claim a missed credit from a prior quarter, file an adjusted return such as 941-X with the corrected figures.
  • Form 8849 – Tax-exempt employers who don’t file Form 941 can use this to claim refunds of their employee retention credits instead.
  • Form 5884-A – Retention credits for qualified sick and family leave wages under FFCRA should be reported on this form, separate from the retention credit for other wages.
  • Employee Records – Detailed wage payment records per employee per quarter must be maintained to support credit calculations.
  • Form 3800 – If credits exceed tax liabilities for the year, the excess can be carried forward on this general business credit form.

Following instructions for these forms will help Coral Springs employers properly document and claim all retention credits they have earned. The credit equates to 70% of qualified wages paid per quarter.

Where can I get help understanding the employee retention credit in Coral Springs, FL?

There are several options business owners can pursue to get help understanding and claiming the valuable employee retention tax credit in Coral Springs, FL:

  • Consult with a local CPA or tax preparation professional who is familiar with the credit requirements and claiming process. An expert can review your situation and tax records to identify and maximize available credits.
  • Reach out to area HR services providers that have experience assisting clients with retention credits. They can explain the details and ensure proper documentation.
  • Check resources made available through local Coral Springs and South Florida business associations. Many provide guides, checklists, and access to credit-eligible employers.
  • Review information directly on IRS.gov, including instructions for forms like 941 and 941-X. The IRS COVID-19 resource page also contains FAQs on employee retention credits.
  • Search for specialized employee retention credit preparation services that work remotely with businesses nationwide. They can evaluate eligibility and file amended returns.
  • Attend a virtual seminar hosted by tax professionals explaining the credit and how to claim it before it expires on December 31, 2021.
  • Discuss with your payroll provider – they may offer services to identify and claim the credit or integrate with a tax expert.

With expert assistance, Coral Springs employers can feel confident they are receiving the full tax credits available for retaining employees during the pandemic.

Here are two links to additional resources related to the employee retention tax credit:

https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

This IRS page provides answers to frequently asked questions about the employee retention tax credit, including eligibility, calculating the credit amount, and claiming the credit.

https://www.journalofaccountancy.com/news/2020/dec/employee-retention-credit-guidance-addressing-common-issues-released.html

This article from the Journal of Accountancy summarizes guidance from the IRS on common issues and questions when claiming the employee retention tax credit.

Here are two links to additional resources related to the employee retention tax credit:

https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

This IRS page provides answers to frequently asked questions about the employee retention tax credit, including eligibility, calculating the credit amount, and claiming the credit.

https://www.journalofaccountancy.com/news/2020/dec/employee-retention-credit-guidance-addressing-common-issues-released.html

Note:

Affiliate Disclaimer: From time to time, I will promote, endorse, or suggest products
and/or services for sale that are not my own. My recommendation is ALWAYS based on
My personal belief is that the product and its creator will provide excellent and valuable
information or service. This may be based on a review of that product, my personal or
professional relationship with that person or company, and/or a previous positive
experience with the person or company whose product I am recommending. In most
cases, I will be compensated via a commission if you decide to purchase that product
based on my recommendation.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top