Jay Woods on WFTS Tampa Morning Blend to Promote ERC Program
TAMPA BAY’S MORNING BLEND
Jay Woods, Founder & CEO of Omega Accounting Solutions, discusses who may still be eligible for ERC funds, how to take advantage of the tax incentive, which industries are most likely to benefit from the ERC, plus how the rules have changed this tax year from last. Woods appeared on the TV show Tampa Bay’s Morning Blend to offer information on a pandemic tax credit that helps small businesses recover from COVID challenges.
The last two years of trying to keep businesses afloat in a pandemic have been difficult for everyone − even more so for small- and medium-sized businesses (SMBs). Worker shortages, supply chain problems, changes in spending habits and what seems like a never-ending list of challenges have had a huge impact on those just trying to make a living.
According to the World Economic Forum, 99.9% of all businesses in the U.S. qualify as small businesses, collectively employing almost 60 million Americans. As these businesses struggled to adapt how they do business in the pandemic, the Federal government funded the Paycheck Protection Program (PPP) and Employee Retention Credit (ERC) programs to help SMBs stay open and continue paying their employees.
According to Forbes, the IRS anticipated that 70%-80% of SMBs and tens of thousands of charities would apply for and benefit from the ERC. The actual numbers, though, are far lower than that. Employers at these companies and charities have left billions of dollars on the table − up to $26,000 per employee based on payroll taxes.
About Omega Accounting Solutions
Omega Accounting Solutions is a is an accounting and data firm that empowers small businesses to make informed business decisions through the production of accurate and timely books that yield honest, insightful, actionable reports. The Laguna Niguel, Calif., firm founded by Jay Woods works with CFOs, controllers, accountants and software developers to collect, integrate, analyze and present essential data that allow for healthy corporate operation and growth. About us
WFTS Tampa Bay Morning Blend: 99% of businesses in the united states are considered small businesses. Combine the small businesses with medium businesses and, well, there were a lot of people affected by the pandemic. From worker shortages to supply chain issues — but there still may be some help out there, so let’s go ahead and bring in Jay Woods, founder and President of Omega Accounting to get his thoughts on maybe getting some help to some of these people… Jay, how are you today?
Jay Woods: I’m doing great
WFTS: Well let’s go ahead dive right in, I mean what can businesses do let’s kind of start broad what can they do to make up for that lost pandemic revenue, i’m sure it’s being referred to as now.
Jay Woods: Yeah, so there is a great program called the employee retention tax credit that’s available to to business owners of 500 employees or less, and essentially this this wage credit a business can can get up to 26,000 per employee it’s a very powerful and valuable credit that businesses need to be looking at…
WFTS: I’m curious jay were there any changes to this tax credit from you know 2020 to even 2021?
Jay Woods: Yeah, you know the the landscape of the pandemic it really affected these credits and so at the onslaught of the pandemic congress came out with relief programs… they came out with the PPP program, paycheck protection program, that was very popular at the same time they came out with the employee retention tax credit. At that time, you had to pick a path and so most people thought or went to dealing with their bank and and as opposed to the IRS so the the ERC program was pretty underutilized, quite frankly. In the beginning of 2021 the Biden administration came in, changed that: they opened it up to where you could do both credits and so the credit for 2020. You have to have under 100 employees, you can get up to 5000 per employee, and in 2021 that really increased so the credit applies for the first three quarters of the year you can get up to seven thousand dollars per quarter so twenty one thousand dollars per employee, for 2021.
WFTS: So it’s really a massive credit for the small to mid-size businesses.
Jay Woods: It absolutely is. That’s one of the reasons, of course, we’re doing this interview today is to get this information out there.
WFTS: But you know i’m curious we’ve kind of broke down who qualifies for small size businesses medium-sized businesses what about industries which industry are seen being affected by this most that really needs to think about this credit?
Jay Woods: Yeah, so the the credit is really industry agnostic. Quite frankly it comes down to do you have employees? Are you for profit or not for profit, that
doesn’t matter right so we’re seeing non-profit groups qualify for this credit what it comes down to is, for eligibility, where was your was your revenue impacted? So if you had a revenue decrease of 20% for 2021 or 50% for 2020 you’re going to qualify for this credit but even beyond that if you don’t meet those tests if your business was partially suspended due to a COVID shutdown order and that impacted your business in a nominal way you can qualify so you know a good example would be a restaurant that went from you know its normal course of operations to in to take out only and so that really changes the landscape of their business it eliminates all their opportunity for it you know indoor revenue and so that’s a that’s a partial suspension that qualifies but as the pandemic changed and restrictions were lifted there were still impacts so that same restaurant then a few months later can go back to indoor dining but because of social distancing they have to have you know 50 of the capacity in terms of the number of tables available and so again this is an impact that qualifies for the IRS and so we’re really seeing the effects of supply chain and the worker shortages but even social distancing had a drastic impact on how businesses had to navigate you know with people being remote coming back to to work and how they needed to operate and function!
WFTS: Well Jay, in closing we’re almost out of time here and of course we focused on the employee retention credit but just kind of overall, any other things that employers need to take note of moving into the new year to kind of prepare or any other programs out there?
Jay Woods: Most of the relief programs have kind of set, sunsetted: PPP, the SBA has an economic impact disaster loan that they’re looking to potentially pump more money into so definitely keep tabs on what the SBA is doing… but the reality is you know business owners coming out of the pandemic really need to do an assessment of you know do they have the right counsel and advisement the reality is that small businesses and mid-sized companies are really underserved when it comes to tax credits and there are a bunch of credits that pre-date the pandemic there’s the research and development tax credit employee training tax work opportunity zone you know the government really incentivizes you to retain and employ individuals in certain areas and certain economic conditions, and so if you aren’t aware of these things i think what the pandemic has taught you is there relief out there? Yeah, there are credit opportunities and you really want to make sure that you’re aware of them, and of course having somebody on your side to help you look out for these things.
WFTS: For more information check out omega-accounting.com. Jay thanks for your time today!