Lets talk first about Employee Retention Credit 2021 1120S :
Our group here what do these men doing everybody in this room is assisting teach individuals about ERC and uh always supply a stunning breakfast and have people actually 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 companies and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I indicate you understand if you simply start to take a 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 indicate it’s just I indicate consider the number of actual 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 verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they do not pay anything until they in fact get the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has been finished and how many you believe you’ve processed because you started 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 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 Fantastic here you’re at my YouTube channel we’re discussing something actually crucial today the employee retention credit which most of you have never heard of I certainly had not heard of it up until very recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have staff members in between 5 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 Principles 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 simply call your bank supervisor and state 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 ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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.
remedy the cash cash payroll tax refund alright go on sorry I just need to make certain we got that point I indicate that’s a huge distinction a loan versus cash money I like money 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 original cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual cash from the IRS all right so let’s discuss how it works because it seems 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 individuals on the cap table not for shareholders it’s for employees right you had to have actually owned a company but it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 correct so there were 6 quarters the program was open well walk 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. all right so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s wage 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 worker’s salary to a maximum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the turmoil 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 as much as five thousand Max and then what takes place 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 worker that is because that’s a great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees 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 question is why does nobody learn about this because look when I initially found out about this when I first fulfilled Josh you know I’ve got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many lots of financial investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t think it because I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we used them wisely to survive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician friends Governor Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one know about the employee retention credit you know what’s intriguing 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 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 turmoil since keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this organization and bottom line my firm Kevin has stayed in business because 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate customers have actually dealt with bottom line to recuperate other government programs we have actually 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 encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
employer whose business is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing support usually provide know-how and assistance to help organizations navigate the intricate process of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 1120S
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based on elements such as your industry, profits, and operations. If you fulfill the requirements for the credit and determine the optimum credit amount you can claim, they can help identify.
Paperwork and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based on eligible salaries and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential kinds and documentation on your behalf. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually developed with time. These companies stay upgraded with the latest modifications and guarantee that your filings adhere to the most present guidelines. If the Internal revenue service demands extra details or performs an audit related to your ERC claim, they can likewise provide continuous support.
It is very important to research and vet any company using ERC filing assistance to guarantee their trustworthiness and proficiency. Search for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who offer ERC submitting support.
Keep in mind that while these companies can offer valuable support, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage organizations to retain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, companies need to meet one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As discussed previously, for 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: 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 (approximately 70%) of qualified wages paid to staff members, consisting of specific health plan expenditures. 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, businesses that got an Income Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. The very same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, allowing qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Type 941. The excess can be refunded to the company if the credit exceeds the quantity of work taxes owed.
It is necessary to note that the ERC provisions and eligibility requirements have evolved in time. The very best course of action is to consult with a tax professional or go to the main internal revenue service site for the most updated and in-depth info relating to the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, an organization must meet among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, federal government entities and businesses that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves completing the necessary types and including the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can vary based on numerous factors, consisting of the intricacy of your business and the workload of the IRS. It’s recommended to speak with a tax professional for guidance particular to your circumstance.
There are several companies that can assist with the process of claiming the ERC. Some popular business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on basic knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to consult with a tax professional or go to the main IRS site for the most accurate and up-to-date information regarding eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on earnings paid to all workers whether they in fact worked or not. Simply put, even if the.
employees worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments but likewise a part of the cost of company.
provided healthcare. Employee Retention Credit 2021 1120S
Companies can be instantly compensated for the credit by decreasing the amount of payroll taxes they.