Lets talk first about Employee Retention Credit 3Rd And 4Th Quarter 2021 :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh always provide a lovely breakfast and have people actually learn about the program we must head to the space where we have the ability to show a few of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you know 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 suggest it’s simply I mean think about how many 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 confirmed and the check is on the mail in the mail from the IRS heading to the client 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 receive the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the procedure has actually been completed and how many you believe you’ve processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require 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 speaking about something truly essential today the staff member retention credit which the majority of you have never ever heard of I certainly hadn’t heard of it till extremely just recently and learned 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 5 and five hundred so I have actually got the specialist 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 hard this isn’t like PPP we just call 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 all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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.
remedy the cash cash payroll tax refund fine go on sorry I simply have to make certain we got that point I mean that’s a huge distinction a loan versus cash cash I like money money that’s what we’re speaking about okay 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 real cash from the IRS all right so let’s speak about how it works since it sounds 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 Assumption this money 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 upon you having W-2 employees 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 eligible 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 walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 approximately five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create 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 since that’s a lot of money it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant 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 substantial clearly now the big question is why does no one learn about this since appearance when I first became aware of this when I first fulfilled Josh you understand I’ve got great deals of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of many investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I don’t believe it because I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them wisely to survive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my politician good friends Guv Senators they didn’t know about it I imply that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it extremely clear that if you desired 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 just procedure process that’s all um and here there was chaos since remember in the original cares act you might not do both programs so if you had done PPP you might refrain from doing 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 government never ever made it clear to any person about how to.
do this does your CFO know how to do this not really she or he’s never ever done it in the past 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 company your accountant no your accountant’s never done this before unless you have an account that entered into this organization and bottom line my company Kevin has been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate customers have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property 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 staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, company whose company is completely or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying earnings differs by whether an employer had, usually, basically than.
100 workers in 2019.
Business that focus on ERC filing support normally offer knowledge and assistance to assist companies browse the complex process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 3Rd And 4Th Quarter 2021
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you fulfill the requirements for the credit and determine the optimum credit amount you can declare, they can assist figure out.
Documentation and Estimation: ERC filing services will assist in gathering the required documentation, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit quantity based upon qualified earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the needed kinds and documentation in your place. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved over time. These companies stay updated with the current changes and guarantee that your filings adhere to the most present guidelines. They can likewise supply continuous support if the IRS demands additional details or performs an audit related to your ERC claim.
It is necessary to research and vet any business offering ERC filing help to ensure their reliability and know-how. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC filing assistance.
Remember that while these companies can offer valuable support, it’s constantly a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate companies to maintain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, employers need to satisfy one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a significant decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of certified incomes paid to staff members, including certain health insurance expenditures. The maximum 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 got an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. Nevertheless, the same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, allowing qualified companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for services to change prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Kind 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It’s important to note that the ERC provisions and eligibility criteria have actually developed with time. The best strategy is to consult with a tax professional or go to the official IRS website for the most comprehensive and updated details regarding the ERC, including any recent legal changes or updates.
To receive the ERC, a company must satisfy one of the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a considerable decrease 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 invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and services that received a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC involves completing the needed forms and including the credit on your employment tax return (typically Kind 941). The exact time it requires to process the credit can differ based upon a number of elements, including the complexity of your organization and the work of the internal revenue service. It’s suggested to consult with a tax expert for guidance specific to your scenario.
There are several companies that can help with the process of claiming the ERC. Some well-known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based on general understanding and may not show the most current updates or changes to the ERC. It’s important to seek advice from a tax professional or check out the official internal revenue service website for the most precise and updated information regarding eligibility, declaring treatments, and available support.
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 really worked or not. In other words, even if the.
staff members worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
permitted just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments however likewise a portion of the cost of employer.
offered healthcare. Employee Retention Credit 3Rd And 4Th Quarter 2021
Employers can be instantly reimbursed for the credit by reducing the quantity of payroll taxes they.