Lets talk first about Employee Retention Credit Fourth Quarter 2021 :
Our team here what do these people doing everyone in this space is helping teach individuals about ERC and uh constantly supply a gorgeous breakfast and have individuals truly learn more about the program we should head to the space where we have the ability to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I mean you understand if you just begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I suggest consider how many real 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 validated 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 money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their savings account and they can really rely on Wonder trust that the process has actually been completed and how many you believe you’ve processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you need specialists 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 speaking about something really essential today the employee retention credit which the majority of you have actually never ever heard of I definitely had not heard of it till really recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply contact your bank manager and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big difference right there 2 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 simply need to make certain we got that point I mean that’s a huge distinction a loan versus cash cash I like cash cash that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a gorgeous 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 individual needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have owned an organization but it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 staff members 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 six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite 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 an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that 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 5 thousand Max and after that what happens 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 six thousand dollars per staff member that is since that’s a great deal of money 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 ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the big concern is why does no one learn about this due to the fact that look when I initially found out about this when I first fulfilled Josh you understand I have actually got great deals of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not think it since 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 and that were well been worthy of and we used them carefully to stay alive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician pals 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 individuals told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the worker retention credit you know what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan process 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 nation and they would process process 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 chaos because remember in the initial cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’s never ever 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 accountant no your accounting professional’s never done this prior to unless you have an account that entered into this service and bottom line my company Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have actually dealt with bottom line to recuperate 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 property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose company is fully or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings differs by whether a company had, usually, basically than.
100 workers in 2019.
Companies that specialize in ERC filing assistance typically provide proficiency and assistance to help businesses browse the complex procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Fourth Quarter 2021
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. They can help figure out if you meet the requirements for the credit and recognize the maximum credit amount you can declare.
Documents and Calculation: ERC filing services will help in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit amount based upon qualified earnings and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to identify possible opportunities for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the required kinds and documents in your place. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have developed with time. These companies remain updated with the most recent changes and make sure that your filings adhere to the most current guidelines. They can likewise offer ongoing assistance if the internal revenue service demands extra info or conducts an audit related to your ERC claim.
It’s important to research study and vet any company offering ERC filing help to guarantee their credibility and competence. Search for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who use ERC filing support.
Remember that while these companies can offer important help, it’s always a good idea 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 procedures. The objective of the ERC is to motivate organizations to keep 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 available to eligible employers, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, employers 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 decrease in gross receipts. As mentioned earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly 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 (up to 70%) of qualified earnings paid to employees, consisting of certain health plan expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received a Paycheck 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. Nevertheless, the same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing qualified companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Form 941. The excess can be refunded to the company if the credit goes beyond the amount of work taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have evolved over time. The best course of action is to talk to a tax expert or visit the main IRS site for the most current and in-depth information concerning the ERC, including any current legal modifications or updates.
To receive the ERC, an organization must meet one of 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 decrease in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the exact 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 available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and organizations that got a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC includes completing the essential kinds and including the credit on your work tax return (usually Kind 941). The exact time it requires to process the credit can differ based on numerous factors, including the intricacy of your organization and the workload of the IRS. It’s recommended to speak with a tax expert for assistance specific to your circumstance.
There are a number of business that can assist with the procedure of claiming the ERC. Some popular companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based upon general knowledge and may not show the most recent 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 updated and accurate details regarding eligibility, declaring procedures, and available assistance.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on wages paid to all employees whether they really 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 typically in 2019, then the credit is.
allowed just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not just cash payments but likewise a portion of the cost of employer.
offered healthcare. Employee Retention Credit Fourth Quarter 2021
Employers can be instantly repaid for the credit by lowering the amount of payroll taxes they.