Virginia lawyers, law firms, attorneys and legal professionals in VA that were economically harmed during the pandemic will qualify for the employee retention tax credit. With Virginia Courts shutdown and then limited, legal businesses suffered during 2020 and 2021 in VA.
In Virginia, there are currently 17,540 Virginia Lawyers employed according to the U.S. Bureau of Labor Statistics (BLS). This is a 3.60% change from the previous year. The average Virginia Attorney salary is $146,140 in annual wages in VA.
The State Bar of Virginia regulates and licenses attorneys and lawyers in VA.
Other Virginia Attorney statistics from the American Bar Association (ABA) estimate 23,923 Lawyers certified in VA.
All the State of Virginia legal occupations employ about 35,100 legal professionals that earn an average of $113,850 per year in VA wages.
Did your Virginia CPA, accountant, tax expert, or financial planner tell you that your Virginia law practice does not qualify for the employee retention credit in VA? They may be completely wrong. Don’t rely on the information provided by Virginia professionals who may be unaware of all the detailed IRS guidelines that qualify for the ERC in Virginia.
Virginia Employee Retention Tax Credit for Lawyers and Attorneys in VA
Virginia attorneys, law offices, lawyers, and other specialized legal professionals in VA are eligible to claim the Employee Retention Credit (ERC). They can receive up to 50% of their qualified wages paid between March 12th, 2020, and December 31st, 2020, in the form of a refundable tax credit from the IRS.
Virginia legal businesses that were established before February 15th, 2020, can receive a refundable tax credit amounting to 70% of qualified salaries and wages paid between January 1st, 2021, and September 30th, 2021. For VA law firms created or acquired after that date (referred to as a Recovery Start up), they are eligible for employee wage reimbursement up until December 31st, 2021.
The employee retention credit may be retroactively claimed for 2020 and 2021, through 2023, 2024, and 2025 for your legal practice or firm in Virginia.
VA Employee Retention Credit, How it Works in Virginia
With the Virginia requirements and amount of the ERTC tax credits continually changing with the ERC program, VA attorneys, lawyers, and law firm principals and partners may find it difficult to understand if they qualify and how much they can claim.
To maximize the benefits from this Virginia employee retention tax credit, you must understand which quarters are eligible as well as which employees, wages, and payments meet the criteria for receiving the tax credit.
Virginia Employee Retention Credit Eligibility Requirements for Law Firms, Attorneys, and Lawyers in VA
Virginia legal firms can take advantage of employee retention credit in several ways.
For a Virginia law office to be eligible for the program, it must have gone through an entire or partial closure because of COVID-19 government regulations or any other kind of government-mandated shut down during certain periods in either 2020 or 2021 as a result of this global pandemic.
A Virginia law firm must demonstrate that it has had either a 2020 quarter with gross receipts at least 50% lower than the same quarter in 2019, or in 2021, quarters with 20% fewer gross receipts compared to the corresponding quarters of 2019. Each three-month period of 2020 and 2021 should be compared to its equivalent month period in 2019.
In Virginia, did your law firm experience any of these?
Full or Partial Shutdowns in VA
If your legal office was fully or partially shut down for even a few days due to COVID-19, it would qualify your Virginia law firm for the ERC tax credit.
Virginia Shuttered Courts
Maybe your VA office is not in the county where the courtrooms are, and the local government courtrooms and legal buildings were closed mostly. In this case, you were not able to proactively pursue cases. Therefore, the opposing party or company being sued had zero incentive to settle. This is a valid example for you to qualify to receive the tax credit in Virginia.
Limitations on Jury Trials in Virginia
Due to the shutdown in court operations, the number of jury trials is greatly reduced. This means that even if your legal office is not in the area of the closed courtrooms, you can still be eligible for the tax credit.
No In-Person Virginia Depositions
The inability to conduct in-person depositions has also led to decreased civil court proceedings. Therefore, you may qualify for the tax credit if your law firm has been affected by this limitation.
No In-Person Client Meetings in VA
In some cases, due to the pandemic, VA attorneys were not able to meet with their clients in person. This was an obstacle for Virginia attorneys in defending their cases. If your VA legal office dealt with this situation and had a decrease in revenue due to it, you may be eligible for the ERC tax credit.
Reduction in Legal Services Offered in Virginia
Some Virginia law firms may have had to reduce their clients’ services due to COVID-19, such as not offering in-person legal consultations due to travel restrictions or self-quarantine requirements. If that is the case for you, your legal consultation may be eligible for the ERC tax credit in Virginia.
Calculating Your Virginia Legal Practice Employee Retention Credit in VA
Accurately calculating the Virginia employee retention credit for your firm requires attention to detail, especially when it comes to determining your total gross wages paid during a quarter. Without accurately calculating this figure, you won’t be able to receive the full benefit of this tax credit. Therefore, having a comprehensive understanding of how best to calculate these figures is essential.
How Virginia Legal Employers Claim the Employee Retention Credit?
Although the process of applying for the Virginia ERTC has changed a bit, there’s still time to claim your ERC tax refund. Remember that this window won’t be open forever – it’ll shut in 2023, 2024, and 2025 based on 2020-2021 quarter evaluations. Don’t worry about running out of funds either. These refunds are calculated using each business’ qualifications and financials. The only way you can miss out is by not filing prior to the given deadlines for your practice in Virginia.
Conclusion and Summary for Virginia Attorneys, Lawyers, and Law Firms Employee Retention Credit in VA
To ensure your Virginia Law Firm is in compliance with the Employee Retention Credit, it’s critical to keep all original records, including paystubs, W-2s, and other documents related to legal employee wages. Additionally, any government shutdown executive orders or restrictions in Virginia should be documented.
By understanding the rules of the employee retention credit, law firms, attorneys, and lawyers in Virginia can make sure they’re getting all the financial relief tax benefits due to them. The ERTC provides an opportunity for legal businesses affected by COVID-19 in Virginia to recoup some financial losses.
Virginia Lawyers and Attorneys Qualify for the Employee Retention Tax Credit (ERC / ERTC) in VA: Claim Up To a $26,000 Refund Per Employee for Your Legal Practice in VA
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Depending on eligibility, legal professionals and law firm principals and partners can receive up to $26,000 per employee based on the number of W2 employees you had on the payroll in 2020 and 2021.
The ERC / ERTC Program is a valuable IRS tax credit you can claim for your Virginia law practice.
Schedule Your Free Virginia Employee Retention Credit Consultation to see what amount of employee retention credit tax refund you qualify for your legal practice in Virginia.