Lets talk first about Cares Employee Retention Credit 2021 :
Our group here what do these people doing everybody in this room is assisting teach people about ERC and uh constantly provide a lovely breakfast and have people really learn more about the program we ought to head to the space where we are able to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I mean you understand if you simply begin to look at some 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 just I indicate consider how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything until they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their checking account and they can genuinely trust Wonder trust that the procedure has actually been finished and the number of you think you have actually processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require you need 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 speaking about something really essential today the staff member retention credit which the majority of you have actually never ever become aware of I certainly had not become aware of it up until very recently and found out a lot about it since this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members between five 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 largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call up your bank supervisor and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I simply need to make certain we got that point I mean that’s a huge distinction a loan versus money money I like cash cash 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 initial cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that person had to be a worker 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 staff members right you had to have owned an organization but 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 eligible so you need 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 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted to even get more to keep those staff members 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 after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big question is why does nobody understand about this because look when I initially heard about this when I initially fulfilled Josh you know I have actually got great deals of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t believe it due to the fact that I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them wisely to survive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my political leader good friends Governor 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 individuals told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody know about the worker retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan procedure 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 huge banks in our nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was chaos because remember in the initial cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that 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 know how to do this not actually she or he’s never ever done it previously do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business because 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose business is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all companies regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing help generally offer expertise and assistance to help organizations navigate the complicated process of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Cares Employee Retention Credit 2021
Eligibility Evaluation: These business will evaluate your company’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can assist figure out if you satisfy the requirements for the credit and determine the optimum credit amount you can declare.
Documents and Computation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based upon qualified salaries and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the essential kinds and documentation on your behalf. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have progressed with time. These business remain updated with the most recent changes and make sure that your filings adhere to the most existing guidelines. They can also provide continuous assistance if the IRS demands additional info or conducts an audit related to your ERC claim.
It is essential to research and veterinarian any company offering ERC filing help to guarantee their credibility and know-how. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who use ERC filing support.
Remember that while these companies can provide valuable help, it’s always a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to retain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, employers must satisfy one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of qualified earnings paid to workers, consisting of certain health plan costs. 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 a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. However, the exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, enabling qualified employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for services to modify prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be reimbursed to the company if the credit surpasses the amount of employment taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have actually developed with time. The very best course of action is to seek advice from a tax professional or visit the official internal revenue service site for the most up-to-date and in-depth details concerning the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, a service needs to meet among the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC includes completing the necessary forms and including the credit on your work tax return (typically Kind 941). The exact time it requires to process the credit can vary based on numerous factors, including the complexity of your company and the workload of the internal revenue service. It’s recommended to seek advice from a tax professional for assistance particular to your situation.
There are numerous companies that can help with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some well-known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies straight to ask about their fees and services.
Please keep in mind that the information supplied here is based upon basic knowledge and may not show the most recent updates or changes to the ERC. It’s important to speak with a tax professional or go to the main IRS site for the most current and precise information regarding eligibility, declaring procedures, and offered help.
Less than 100. If the company had 100 or less staff members on average in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
employees 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 workers on average in 2019.
permitted only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however likewise a portion of the cost of employer.
supplied health care. Cares Employee Retention Credit 2021
Companies can be right away reimbursed for the credit by lowering the amount of payroll taxes they.