Lets talk first about Employee Retention Credit Changes 2021 :
Our group here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh constantly offer a lovely breakfast and have individuals really learn about the program we ought to head to the room where we have the ability to display a few 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 numerous millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I indicate you know if you just start to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest think about 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 confirmed the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they really receive 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 bank account and they can really trust Wonder trust that the process has actually been completed and the number of you think you’ve processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you require professionals 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 Wonderful here you’re at my YouTube channel we’re discussing something actually important today the staff member retention credit which most of you have never ever become aware of I definitely had not become aware of it till really just recently and found out a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 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 all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund fine go on sorry I simply need to make certain we got that point I imply that’s a huge distinction a loan versus cash cash I like cash money 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 gorgeous difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works due to the fact that it seems 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 people on the cap table not for shareholders it’s for staff members right you needed to have actually owned a company however it’s based upon you having W-2 staff members 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 qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two 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 favorite part money just 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 exact Kevin is 50 of the employee’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 employee’s wage to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the chaos 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 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York 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 internal revenue service so it’s huge obviously now the huge question is why does no one know about this due to the fact that appearance when I first found out about this when I first met Josh you know I have actually got lots of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it since I utilize 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 and that were well deserved and we used them sensibly to stay alive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even contacted us to my political leader buddies 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 bunch of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one learn about the worker retention credit you know what’s intriguing you’re discussing the banks Kevin because in the PPP loan process 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 huge 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 process that’s all um and here there was chaos due to the fact that keep in mind in the original cares act you might not do both programs so if you had actually done PPP you could 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 federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never done it previously do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accountant no your accountant’s never ever done this prior to unless you have an account that went into this service and bottom line my company Kevin has been in business because 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big huge business clients have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose service is completely or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing assistance typically offer expertise and assistance to assist services browse the complex procedure of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Changes 2021
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon factors such as your market, earnings, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can claim, they can assist identify.
Paperwork and Estimation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit amount based upon qualified earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can examine your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the essential types and documentation on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have progressed gradually. These companies remain updated with the latest modifications and make sure that your filings comply with the most current standards. If the IRS demands additional information or carries out an audit related to your ERC claim, they can also offer continuous assistance.
It is necessary to research study and vet any company providing ERC filing help to ensure their reliability and knowledge. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC filing support.
Remember that while these business can provide important assistance, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to keep and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, companies must satisfy one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As pointed out earlier, for 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (as much as 70%) of qualified wages paid to employees, including specific health insurance costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. The exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing qualified employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to change prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, typically Type 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the company.
It’s important to note that the ERC provisions and eligibility requirements have progressed in time. The best course of action is to talk to a tax expert or visit the official IRS site for the most in-depth and current info regarding the ERC, including any current legislative changes or updates.
To qualify for the ERC, a service needs to fulfill one of the following requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and companies that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC includes finishing the needed types and including the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can differ based upon a number of factors, including the intricacy of your business and the work of the internal revenue service. It’s recommended to talk to a tax professional for assistance specific to your circumstance.
There are a number of companies that can assist with the process of declaring the ERC. Some popular business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based on basic knowledge and may not reflect the most current updates or changes to the ERC. It is necessary to speak with a tax expert or go to the main IRS website for the most accurate and current information regarding eligibility, declaring procedures, and available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all staff members whether they actually worked or not. In other words, even if the.
workers worked full-time and made money 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.
enabled just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just cash payments however likewise a portion of the cost of company.
supplied health care. Employee Retention Credit Changes 2021
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.