Lets talk first about Can You Still Apply For Employee Retention Credit In 2022 :
Our group here what do these people doing everyone in this room is assisting teach people about ERC and uh constantly offer a lovely breakfast and have people truly discover the program we should head to the space where we are able to show 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 millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I imply you understand if you simply begin to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate consider how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they do not pay anything till they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their checking account and they can truly trust Wonder trust that the process has actually been completed and the number of you believe you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require you require specialists 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 Wonderful here you’re at my YouTube channel we’re talking about something really important today the worker retention credit which most of you have actually never ever heard of I definitely had not become aware of it up until very recently and discovered a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I’ve 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 not easy this isn’t like PPP we simply contact your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund alright go on sorry I simply have to ensure we got that point I suggest that’s a big difference a loan versus cash cash I like cash money that’s what we’re speaking about 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual cash from the IRS all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have owned a service but it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 employees and you paid federal payroll taxes that’s why you would be eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus due to the fact that the mayhem 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 as much as five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big certainly now the huge concern is why does no one know about this due to the fact that appearance when I initially became aware of this when I first met Josh you understand I’ve got great deals of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it since I use the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my politician pals Guv Senators they didn’t know about it I mean that’s how you know that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was chaos because remember in the original cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly she or he’s never done it in the past 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 accounting professional’s never done this prior to unless you have an account that went into this company and bottom line my firm Kevin has actually been in business because 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, employer whose service is fully or partly suspended.
decrease by more than 50%.
Accessibility.
1. The credit is readily available to all companies regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help normally supply competence and assistance to assist organizations browse the intricate process of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Can You Still Apply For Employee Retention Credit In 2022
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based upon elements such as your market, revenue, and operations. They can assist determine if you meet the requirements for the credit and determine the optimum credit amount you can declare.
Documentation and Computation: ERC filing services will help in collecting the essential documents, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit quantity based on qualified wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to identify potential chances for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the necessary types and documentation on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have evolved gradually. These companies remain updated with the most recent modifications and ensure that your filings adhere to the most present guidelines. They can likewise supply ongoing assistance if the IRS demands extra info or carries out an audit related to your ERC claim.
It’s important to research and vet any business providing ERC filing support to guarantee their reliability and expertise. Look for established firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who use ERC submitting support.
Bear in mind that while these companies can provide important assistance, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, companies need to fulfill one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of qualified incomes paid to workers, including particular health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they received a PPP loan. Nevertheless, the very 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 salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, generally Form 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the company.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually progressed gradually. The very best strategy is to consult with a tax professional or go to the main IRS site for the most updated and detailed details regarding the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a service must satisfy among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, government entities and businesses that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC involves finishing the essential kinds and consisting of the credit on your employment tax return (generally Form 941). The exact time it requires to process the credit can differ based on a number of elements, consisting of the intricacy of your business and the work of the IRS. It’s recommended to talk to a tax professional for guidance particular to your situation.
There are several companies that can help with the procedure of claiming the ERC. Some widely known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on general understanding and might not show the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or check out the main internal revenue service site for the most precise and up-to-date details relating to eligibility, declaring procedures, and readily available help.
Less than 100. If the employer had 100 or fewer workers on average in 2019, then the credit is based.
on earnings paid to all employees whether they really worked or not. To put it simply, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments however likewise a portion of the cost of company.
offered healthcare. Can You Still Apply For Employee Retention Credit In 2022
Payment.
Companies can be right away reimbursed for the credit by reducing the quantity of payroll taxes they.