Lets talk first about Employee Retention Credit For 4Th Quarter 2021 :
Our group here what do these people doing everyone in this space is helping teach individuals about ERC and uh constantly offer a lovely breakfast and have people really discover the program we must head to the room where we are able to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I imply you know if you simply start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I suggest consider how many real clients that went through the program yeah this is the very end this is the party at the end when the check is verified 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 opted for sure which’s when they pay so they do not pay anything till they actually get the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their bank account and they can truly trust Wonder trust that the procedure has actually been finished and how many you believe you’ve processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you need professionals 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 Terrific here you’re at my YouTube channel we’re talking about something really crucial today the staff member retention credit which most of you have never ever become aware of I definitely hadn’t become aware of it until really recently and found out a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 just call up your bank supervisor 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 ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund alright go on sorry I just need to make sure we got that point I imply that’s a big difference a loan versus money money I like money 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 gorgeous difficult check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s employee retention credit that individual had to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have owned a service however it’s based upon you having W-2 workers 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 six quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. fine 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 cash just how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary 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 employee’s wage to an optimum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wished 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 up to five 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 staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York 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 because appearance when I initially heard about this when I first met 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 lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not think it because I use 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 and that were well deserved and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t know about it I imply that’s how you understand that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s interesting you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process procedure 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 due to the fact that keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from 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 truly he or she’s never done it before do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business 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 actually been in business because 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have dealt with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose organization is totally or partially suspended.
decrease by more than 50%.
Accessibility.
1. The credit is available to all companies regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether a company had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing assistance normally provide expertise and assistance to assist services browse the complex procedure of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit For 4Th Quarter 2021
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based on elements such as your market, revenue, and operations. They can assist figure out if you meet the requirements for the credit and recognize the optimum credit amount you can claim.
Documentation and Calculation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based on qualified wages and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize potential chances for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the needed types and documentation on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have developed gradually. These business stay upgraded with the latest changes and ensure that your filings abide by the most existing guidelines. They can likewise offer ongoing support if the internal revenue service demands additional details or performs an audit related to your ERC claim.
It is essential to research and veterinarian any business providing ERC filing help to ensure their credibility and know-how. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who use ERC filing assistance.
Bear in mind that while these companies can offer important support, 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 make sure 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 goal of the ERC is to encourage organizations 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 qualified companies, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers should satisfy one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified earnings paid to employees, consisting of 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: At first, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. However, the very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, permitting qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the amount of work taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually evolved with time. The best strategy is to talk to a tax expert or go to the main IRS site for the most updated and detailed information concerning the ERC, including any current legal modifications or updates.
To receive the ERC, a company needs to fulfill one of the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and companies that received a PPP loan might have limitations on claiming the credit.
The process for declaring the ERC involves finishing the essential forms and including the credit on your employment tax return (normally Form 941). The exact time it requires to process the credit can vary based on numerous elements, consisting of the complexity of your company and the workload of the internal revenue service. It’s suggested to consult with a tax expert for assistance particular to your situation.
There are a number of companies that can assist with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to inquire about their services and fees.
Please keep in mind that the information provided here is based upon basic knowledge and may not reflect the most recent updates or changes to the ERC. It is necessary to seek advice from a tax expert or check out the official internal revenue service site for the most updated and accurate details regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on salaries paid to all workers whether they in fact worked or not. Simply put, even if the.
workers 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 staff members on average in 2019, then the credit is.
allowed only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not simply cash payments however also a part of the cost of company.
offered health care. Employee Retention Credit For 4Th Quarter 2021
Payment.
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.