Lets talk first about Covid Employee Retention Credit 2020 :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly offer a lovely breakfast and have individuals actually discover the program we should head to the room where we are able to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you understand if you just start to take a look at a few 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 just I indicate consider how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they really get the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their checking account and they can genuinely trust Wonder trust that the process has been finished and how many you believe you have actually processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need you require experts 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 employee retention credit which most of you have never ever heard of I definitely hadn’t become aware 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 company anywhere
anytime if you have employees in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest 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 manager and say give me a loan it does not 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’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I just have to make certain we got that point I indicate that’s a big difference a loan versus cash cash I like cash money that’s what we’re talking about fine 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 hard check in the mail where you get real 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 worker retention credit that person needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have actually owned a business however it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 workers 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 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part money how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the chaos of the pandemic so they wished 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 five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a lot of money it is now there’s a caveat here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the huge concern is why does nobody understand about this because look when I first became aware of this when I initially fulfilled Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of lots of investments in business owners of which many suffered through the pandemic when I initially heard about this I called BS I don’t think it since I use the PPP we went through the money 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 stay alive during the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no info out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one know about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin since 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 process process that’s all um and here there was mayhem since remember in the initial cares act you could refrain from doing both programs so if you had done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really 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 done this before unless you have an account that entered into this business and bottom line my firm Kevin has been in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, company whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers despite size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, typically, basically than.
100 workers in 2019.
Companies that focus on ERC filing assistance typically offer expertise and assistance to help services navigate the complicated procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Covid Employee Retention Credit 2020
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can assist determine if you satisfy the requirements for the credit and identify the maximum credit quantity you can claim.
Documentation and Estimation: ERC filing services will help in gathering the required paperwork, such as payroll records and financial statements, to support your claim. They will also help calculate the credit amount based on qualified salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the needed forms and documents in your place. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved with time. These companies remain updated with the current changes and guarantee that your filings comply with the most existing guidelines. They can also provide continuous support if the internal revenue service requests additional details or conducts an audit related to your ERC claim.
It is necessary to research and veterinarian any company offering ERC filing assistance to ensure their credibility and knowledge. Search for established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax specialists who offer ERC submitting support.
Remember that while these companies can offer valuable assistance, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate businesses to retain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, employers should fulfill one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As mentioned earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts 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 quantity amounts to a portion (up to 70%) of certified wages 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: At first, businesses that received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. The same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, allowing qualified companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Kind 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the employer.
It is necessary to note that the ERC provisions and eligibility criteria have progressed over time. The very best strategy is to seek advice from a tax expert or visit the main internal revenue service website for the most detailed and current information concerning the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a service should satisfy one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, federal government entities and organizations that received a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC includes finishing the required kinds and consisting of the credit on your work income tax return (usually Type 941). The exact time it takes to process the credit can vary based upon a number of elements, consisting of the intricacy of your service and the work of the internal revenue service. It’s suggested to speak with a tax professional for assistance particular to your scenario.
There are a number of business that can assist with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some well-known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these business straight to ask about their services and fees.
Please keep in mind that the information offered here is based upon general understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax expert or check out the official internal revenue service website for the most up-to-date and accurate details regarding eligibility, claiming treatments, and available support.
Less than 100. If the employer had 100 or less workers usually in 2019, then the credit is based.
on incomes paid to all staff members whether they actually worked or not. In other words, even if the.
workers worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
enabled just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments however likewise a portion of the cost of company.
provided health care. Covid Employee Retention Credit 2020
Companies can be instantly reimbursed for the credit by lowering the quantity of payroll taxes they.