Lets talk first about Claiming Employee Retention Credit For 2020 :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh constantly offer a lovely breakfast and have individuals actually find out about the program we should head to the room 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 numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I indicate you know if you just start to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I mean consider how many real clients 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 validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything up until they in fact receive the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed 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 ended up and the number of you think you’ve 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 which’s what you require you require specialists on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something truly important today the staff member retention credit which most of you have never ever become aware of I certainly hadn’t heard of it up until extremely just recently and found out a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call up your bank manager and state provide me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to learn all about it let’s talk staff member 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 provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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.
correct the money cash payroll tax refund alright go on sorry I just have to ensure we got that point I mean that’s a big difference a loan versus cash cash I like cash money that’s what we’re talking 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 beautiful tough check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have owned a business but it’s based on you having W-2 workers 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 have to be on payroll for the first six months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s income to a maximum 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 a maximum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus because 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 up to five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a great deal of money it is now there’s a caution 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 on average Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city 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 IRS so it’s huge clearly now the huge question is why does no one understand about this since appearance when I initially found out about this when I first met Josh you know I’ve got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of many investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t believe it since I utilize 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 utilized them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no information out there then a bunch of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one understand about the worker retention credit you understand what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was chaos due to the fact that keep in mind in the original cares act you might refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually he or she’s never done it before 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 accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose company is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Availability.
1. The credit is available to all companies regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance normally supply know-how and assistance to help organizations navigate the complex procedure of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Claiming Employee Retention Credit For 2020
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. They can assist figure out if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Paperwork and Computation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit quantity based upon eligible incomes and other certifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the required forms and documents on your behalf. This consists of finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually developed in time. These companies stay upgraded with the most recent modifications and make sure that your filings abide by the most present guidelines. They can likewise offer ongoing assistance if the IRS demands additional details or carries out an audit related to your ERC claim.
It’s important to research study and vet any business offering ERC filing help to ensure their credibility and knowledge. Try to find established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who provide ERC submitting support.
Remember that while these companies can provide important help, it’s always a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, employers must meet one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As discussed previously, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (up to 70%) of qualified earnings paid to employees, including particular health plan costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Form 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the company.
It is very important to note that the ERC arrangements and eligibility requirements have developed in time. The best course of action is to talk to a tax expert or visit the main IRS website for the most comprehensive and up-to-date info relating to the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a company must fulfill one of the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. 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 significant 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 right away preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC includes completing the essential forms and including the credit on your employment income tax return (typically Form 941). The exact time it takes to process the credit can differ based upon a number of aspects, consisting of the complexity of your service and the work of the internal revenue service. It’s advised to consult with a tax professional for guidance particular to your circumstance.
There are several companies that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some popular business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to inquire about their services and costs.
Please note that the details offered here is based upon basic knowledge and might not show the most recent updates or modifications to the ERC. It is very important to seek advice from a tax professional or check out the official IRS website for the most updated and accurate information regarding eligibility, claiming treatments, and available help.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on incomes paid to all workers 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 employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments but also a part of the cost of company.
offered healthcare. Claiming Employee Retention Credit For 2020
Payment.
Companies can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.