Lets talk first about Employee Retention Credit New Business 2020 :
Our team here what do these people doing everybody in this room is assisting teach people about ERC and uh always provide a stunning breakfast and have individuals truly learn more about the program we ought to head to the space where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I imply you understand if you simply begin to take a look at some 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 consider 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 validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they don’t pay anything up until they in fact get the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their bank account and they can genuinely rely on Wonder trust that the procedure has actually been ended up and how many you think you’ve processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually essential today the staff member retention credit which the majority of you have never heard of I definitely hadn’t become aware of it up until extremely recently and learned a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 simply call up your bank supervisor and state give me a loan it doesn’t 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away very 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 developed the cares Act and the cares act provided organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I just need to make sure we got that point I suggest that’s a big distinction a loan versus money money I like money money that’s what we’re talking about fine 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 lovely hard check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s worker retention credit that person had to be a worker 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 workers right you needed to have owned a service however it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 employees 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 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part money just how much can you get back per employee 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 wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus since the mayhem of the pandemic so they wished to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of money it is now there’s a caveat here the PPP cash would have to be reduced 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 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the big question is why does nobody know about this because look when I initially found out about this when I first met Josh you understand I’ve got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t think it since I utilize 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 which were well deserved and we used them carefully to stay alive during the pandemic so when I found out about this I stated 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 indicate that’s how you understand that’s how false information is that there’s no details 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 nobody know about the worker retention credit you know what’s fascinating you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 process that’s all um and here there was mayhem due to the fact that remember in the initial cares act you could not do both programs so if you had actually 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 understand how to do this not truly 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 a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has stayed in business given that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big corporate customers have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
employer whose company is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end 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 works for wages paid after March 13th and before December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, usually, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support typically offer know-how and support to assist companies browse the intricate process of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit New Business 2020
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based on elements such as your market, profits, and operations. They can assist identify if you meet the requirements for the credit and identify the optimum credit quantity you can declare.
Documentation and Estimation: ERC filing services will assist in gathering the essential documentation, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit amount based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can examine your past payroll records and financials to recognize potential chances for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the required forms and paperwork in your place. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have developed over time. These companies stay updated with the current modifications and make sure that your filings comply with the most existing standards. They can also provide ongoing support if the IRS demands extra information or conducts an audit related to your ERC claim.
It is essential to research study and veterinarian any company providing ERC filing assistance to ensure their credibility and know-how. Look for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who provide ERC filing assistance.
Bear in mind that while these companies can supply important assistance, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate companies to keep and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, companies must satisfy one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As mentioned earlier, for 2021, a substantial decline is specified 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% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of certified wages paid to employees, consisting of certain health insurance expenses. The optimum 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 received an Income Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. The same wages 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 claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC arrangements and eligibility requirements have evolved gradually. The best strategy is to consult with a tax expert or visit the main internal revenue service website for the most comprehensive and current info regarding the ERC, including any current legislative changes or updates.
To qualify for the ERC, a company needs to fulfill one of the following requirements:.
The business operations were totally 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 invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, government entities and companies that received a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC includes finishing the essential types and including the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can differ based on several factors, including the complexity of your service and the work of the internal revenue service. It’s suggested to speak with a tax expert for assistance particular to your scenario.
There are several business that can help with the procedure of declaring the ERC. Some widely known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on basic knowledge and might not reflect the most recent updates or modifications to the ERC. It is necessary to speak with a tax expert or go to the official internal revenue service site for the most precise and updated info regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. If the company had 100 or fewer employees typically in 2019, then the credit is based.
on earnings paid to all workers 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 employer still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply cash payments however also a part of the cost of company.
supplied healthcare. Employee Retention Credit New Business 2020
Companies can be right away compensated for the credit by decreasing the amount of payroll taxes they.