Lets talk first about Employee Retention Credit 2020 Eligibility :
Our group here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly provide a beautiful breakfast and have people really discover the program we need to head to the space where we are able to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I mean you understand if you simply start 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 mean it’s just I mean think of 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 validated 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 have the ability to track it you understand when you
receive this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they actually get the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their savings account and they can really trust Wonder trust that the procedure has actually been ended up and how many you believe you have actually processed considering that you began this we’re about 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 experts 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 Fantastic here you’re at my YouTube channel we’re talking about something really essential today the employee retention credit which most of you have never become aware of I definitely hadn’t heard of it until very just recently and found out a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator 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 call your bank manager and say offer me a loan it does not 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 have actually become yes the Ambassador and paid spokesperson 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 came up with the cares Act and the cares act provided companies 3 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 precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I simply need to ensure we got that point I imply that’s a big distinction a loan versus cash cash I like cash cash 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get actual money from the IRS 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 cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned an organization however it’s based on you having W-2 employees in America not 10.99. 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 have to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since 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 occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of cash 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 minimize 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 say 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 money you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the huge concern is why does nobody understand about this because appearance when I first became aware of this when I first fulfilled Josh you know I have actually got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t think it because I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them carefully to survive throughout 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 political leader friends Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the worker retention credit you know what’s intriguing you’re discussing 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 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 mayhem due to the fact that keep in mind in the initial cares act you could not do both programs so if you had done PPP you might refrain from doing ERC in the original program and when they altered 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 anybody about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has stayed 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 great deal of our big huge business clients have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
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 total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that focus on ERC filing support typically provide proficiency and support to assist companies browse the complicated process of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2020 Eligibility
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based on factors such as your industry, profits, and operations. If you meet the requirements for the credit and identify the optimum credit amount you can declare, they can help figure out.
Documentation and Calculation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit amount based on eligible wages and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the required types and documentation in your place. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have progressed in time. These business stay updated with the current modifications and make sure that your filings adhere to the most current guidelines. If the Internal revenue service demands extra info or conducts an audit associated to your ERC claim, they can also supply continuous support.
It is essential to research study and vet any company providing ERC filing assistance to guarantee their trustworthiness and knowledge. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who use ERC submitting assistance.
Keep in mind that while these business can supply valuable assistance, it’s constantly a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure 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 measures. 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 impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers must satisfy one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out earlier, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of certified incomes paid to staff members, consisting of specific 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: Initially, services that got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim 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 enhanced, enabling qualified employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to change prior-year income tax return 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 company if the credit exceeds the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually evolved in time. The very best course of action is to talk to a tax professional or visit the official internal revenue service site for the most up-to-date and comprehensive information concerning the ERC, including any current legislative modifications or updates.
To qualify for the ERC, an organization must satisfy one of the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and organizations that got a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC involves finishing the necessary types and including the credit on your work tax return (normally Kind 941). The exact time it requires to process the credit can differ based on several factors, consisting of the intricacy of your company and the workload of the internal revenue service. It’s recommended to talk to a tax expert for assistance specific to your situation.
There are several business that can assist with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some widely known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and get in touch with these companies straight to inquire about their costs and services.
Please note that the details offered here is based on general knowledge and may not show the most recent updates or changes to the ERC. It’s important to speak with a tax expert or check out the official IRS site for the most current and precise info concerning eligibility, claiming procedures, and offered support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings paid to all workers whether they actually worked or not. Simply put, even if the.
workers worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “salaries” includes not simply money payments but also a portion of the expense of company.
provided health care. Employee Retention Credit 2020 Eligibility
Companies can be instantly reimbursed for the credit by lowering the amount of payroll taxes they.