Lets talk first about Do I Qualify For The Employee Retention Credit 2021 :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always supply a gorgeous breakfast and have individuals truly learn about the program we need to head to the room where we have the ability to show some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars literally 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 start to take a 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 suggest it’s just I mean consider 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 confirmed the numbers are confirmed 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
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their savings account and they can truly rely on Wonder trust that the procedure has been ended up and the number of you think you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you need 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 truly essential today the worker retention credit which most of you have never become aware of I certainly hadn’t become aware of it till extremely just recently and learned a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have employees 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call up your bank manager and state provide me a loan it doesn’t 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 ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I just have to ensure we got that point I suggest that’s a big distinction a loan versus cash cash I like cash cash that’s what we’re talking about alright 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 tough check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have owned a service however it’s based upon you having W-2 employees 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 eligible so you have 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 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you return 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 staff member’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that occur um they just 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 employees 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 develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of money it is now there’s a caution here the PPP money would need to be minimized 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 money someplace around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment 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 undoubtedly now the big concern is why does nobody learn about this due to the fact that appearance when I first found out about this when I first satisfied Josh you know I have actually got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of many investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I don’t believe it due to the fact that I utilize 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 which were well deserved and we used them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that 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 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 simply process procedure that’s all um and here there was mayhem because keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered 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 ever made it clear to any person about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this service and bottom line my company Kevin has stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge business clients have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other 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 wages paid by an.
company whose service is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Accessibility.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of a similar 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 incomes paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes differs by whether a company had, typically, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing help typically offer expertise and assistance to assist organizations navigate the complex procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Do I Qualify For The Employee Retention Credit 2021
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon elements such as your market, income, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can claim, they can help figure out.
Paperwork and Computation: ERC filing services will assist in gathering the required documentation, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit quantity based upon eligible incomes and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to determine potential chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the required forms and paperwork in your place. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have evolved over time. These business remain updated with the most recent modifications and guarantee that your filings comply with the most existing guidelines. They can likewise provide ongoing support if the IRS demands extra information or performs an audit related to your ERC claim.
It is essential to research and vet any business providing ERC filing assistance to ensure their credibility and knowledge. Try to find established companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who offer ERC submitting support.
Bear in mind that while these companies can supply valuable help, it’s constantly a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and guarantee 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 measures. The goal of the ERC is to motivate organizations to retain and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To certify, employers should fulfill one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As mentioned previously, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the 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% decline in gross invoices 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 percentage (up to 70%) of certified wages paid to staff members, including specific health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received an Income Defense Program (PPP) loan were not qualified 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 earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Form 941. The excess can be refunded to the employer if the credit exceeds the quantity of employment taxes owed.
It is essential to note that the ERC provisions and eligibility requirements have actually developed in time. The best course of action is to speak with a tax professional or visit the official IRS site for the most comprehensive and updated info relating to the ERC, including any current legal changes or updates.
To get approved for the ERC, a service should satisfy one of the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and organizations that received a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the required kinds and consisting of the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon several elements, including the intricacy of your organization and the work of the IRS. It’s suggested to talk to a tax expert for guidance specific to your situation.
There are numerous companies that can assist with the process of declaring the ERC. Some popular business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon general knowledge and may not reflect the most recent updates or changes to the ERC. It is very important to seek advice from a tax expert or visit the official IRS site for the most current and precise information concerning eligibility, declaring procedures, and available assistance.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. Simply put, even if the.
staff members worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
enabled just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments however also a part of the expense of employer.
provided health care. Do I Qualify For The Employee Retention Credit 2021
Payment.
Companies can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.