Lets talk first about Employee Retention Credit March 2021 :
Our team here what do these men doing everybody in this room is assisting teach people about ERC and uh always supply a beautiful breakfast and have individuals actually learn about 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 ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I mean you know if you just start to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean think about how many actual clients that went through the program yeah this is the very end this is the party 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 customer so that’s how you have the ability to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they actually get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the process has been completed and how many you think you have actually processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need you require 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 talking about something really essential today the staff member retention credit which most of you have actually never ever heard of I certainly had not become aware of it up until extremely recently and discovered a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder 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 contact your bank manager and state give me a loan it does not 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 become yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used 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 difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I just have to make certain we got that point I indicate that’s a big distinction a loan versus money cash I like cash money that’s what we’re discussing 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 initial 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 discuss 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 cash is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned a business however it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 workers and you paid federal payroll taxes that’s why you would be qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part money how much can you return per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because 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 after that what takes place 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 6 thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city 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 substantial clearly now the huge concern is why does nobody learn about this because appearance when I first became aware of this when I initially met Josh you know I have actually got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous many investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I do not think it since I use 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 which were well deserved 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 however when I dug around I even contacted us to my politician friends Guv Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody learn about the worker retention credit you know what’s interesting you’re speaking about 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 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 process procedure that’s all um and here there was mayhem because keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could 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 federal government never made it clear to anyone about how to.
do this does your CFO know how to do this not really he or she’s never ever done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never done this before unless you have an account that went into this company and bottom line my company Kevin has actually been in business considering that 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge big corporate clients have actually dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, company whose company is totally or partially suspended.
decrease by more than 50%.
Availability.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed 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 receipts are below 50% of the similar quarter in 2019. When the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether a company had, usually, basically than.
100 employees in 2019.
Companies that specialize in ERC filing help usually supply competence and support to assist services browse the complex process of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit March 2021
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based on aspects such as your market, earnings, and operations. They can help identify if you fulfill the requirements for the credit and recognize the maximum credit quantity you can declare.
Documents and Estimation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and monetary statements, to support your claim. They will also help determine the credit quantity based upon qualified incomes and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the necessary types and documents in your place. This includes completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually progressed gradually. These companies remain upgraded with the current modifications and ensure that your filings comply with the most present standards. If the IRS demands additional info or conducts an audit related to your ERC claim, they can also offer ongoing support.
It’s important to research and veterinarian any company using ERC filing support to ensure their trustworthiness and expertise. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax professionals who offer ERC submitting support.
Bear in mind that while these business can supply valuable help, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage businesses to maintain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies should meet one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. 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 decrease 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 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 percentage (up to 70%) of qualified salaries paid to workers, consisting of specific health plan 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, companies that got an Income Security 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 got a PPP loan. Nevertheless, 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 broadened and improved, permitting qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Kind 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to note that the ERC arrangements and eligibility criteria have developed gradually. The very best course of action is to speak with a tax professional or check out the official internal revenue service site for the most comprehensive and up-to-date information regarding the ERC, including any current legislative modifications or updates.
To get approved for the ERC, an organization should satisfy among the following criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and services that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the needed kinds and including the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the complexity of your company and the work of the IRS. It’s advised to seek advice from a tax professional for guidance specific to your circumstance.
There are numerous companies that can assist with the process of declaring the ERC. Some widely known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon general understanding and might not reflect the most current updates or modifications to the ERC. It is necessary to speak with a tax expert or go to the main internal revenue service site for the most up-to-date and precise information relating to eligibility, declaring procedures, and readily available help.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. To put it simply, even if the.
workers worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments but also a part of the expense of employer.
supplied healthcare. Employee Retention Credit March 2021
Payment.
Companies can be immediately repaid for the credit by lowering the quantity of payroll taxes they.