Lets talk first about 4Th Quarter 2021 Employee Retention Credit :
Our group here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly supply a gorgeous breakfast and have individuals really find out about the program we should head to the space where we are able to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I imply you know if you simply start to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I mean think about how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything until they really get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has been finished and the number of you think you’ve processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you require professionals on the other end of the phone to process this and get it to where you get among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something really important today the staff member retention credit which most of you have never heard of I definitely had not heard of it till really just recently and learned a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call up your bank supervisor and say give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund fine go on sorry I just have to make sure we got that point I suggest that’s a huge distinction a loan versus cash money I like money cash that’s what we’re discussing all right and the other loans are done so we’re sitting here in 2023 and the eidl is over the PPP is over and the only one left from the initial cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real cash from the IRS all right so let’s talk about how it works since it seems like to me if it’s a if it’s staff member retention credit that individual had to be a staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you had to have actually owned a service however it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the huge question is why does no one understand about this since look when I initially heard about this when I first met Josh you understand I’ve got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous many investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I do not think it because I utilize the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well should have and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my political leader friends Governor Senators they didn’t learn about it I suggest that’s how you know that’s how false information is that there’s no details out there then a lot of people informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one understand about the staff member retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was mayhem since remember in the original cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this before unless you have an account that went into this organization and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge big business customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose business is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages differs by whether a company had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing assistance usually provide know-how and assistance to help organizations browse the complex process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? 4Th Quarter 2021 Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on aspects such as your industry, income, and operations. If you satisfy the requirements for the credit and determine the optimum credit quantity you can declare, they can assist determine.
Documents and Calculation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based upon eligible salaries and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to identify prospective chances for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the necessary types and documents on your behalf. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have progressed over time. These business remain updated with the current changes and ensure that your filings adhere to the most current standards. If the Internal revenue service demands extra information or performs an audit associated to your ERC claim, they can also provide continuous support.
It’s important to research study and veterinarian any business using ERC filing help to ensure their reliability and know-how. Try to find recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who use ERC filing support.
Remember that while these business can provide important support, it’s always a great concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate organizations to maintain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To certify, employers should meet one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As mentioned previously, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of qualified salaries paid to workers, including certain health plan expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. However, the same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Form 941. The excess can be reimbursed to the company if the credit surpasses the quantity of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually developed in time. The very best strategy is to consult with a tax professional or visit the main IRS website for the most in-depth and updated info relating to the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a company should satisfy one of the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, federal government entities and companies that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC involves completing the essential forms and including the credit on your employment income tax return (usually Type 941). The exact time it takes to process the credit can differ based upon numerous aspects, consisting of the complexity of your organization and the work of the internal revenue service. It’s recommended to consult with a tax expert for assistance particular to your scenario.
There are numerous business that can assist with the procedure of claiming the ERC. Some popular companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based on basic understanding and might not show the most recent updates or modifications to the ERC. It’s important to consult with a tax expert or visit the main internal revenue service website for the most precise and updated info relating to eligibility, declaring procedures, and available assistance.
Less than 100. If the company had 100 or less employees typically in 2019, then the credit is based.
on earnings paid to all employees whether they in fact worked or not. In other words, even if the.
workers worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not simply cash payments however also a part of the cost of employer.
offered healthcare. 4Th Quarter 2021 Employee Retention Credit
Companies can be immediately compensated for the credit by minimizing the amount of payroll taxes they.