Lets talk first about Employee Retention Credit Q2 2021 :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh constantly offer a lovely breakfast and have people truly find out about the program we should head to the space where we have the ability to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest you know if you simply begin to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I imply consider the number of real customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are confirmed 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 know when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they really 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 checking account and they can truly rely on Wonder trust that the procedure has been completed and the number of you think you have actually processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require 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 really essential today the worker retention credit which the majority of you have actually never heard of I certainly hadn’t become aware of it up until extremely just recently and discovered a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees in 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 call 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 inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund okay go on sorry I simply need to make sure we got that point I indicate that’s a big difference a loan versus cash money I like cash money that’s what we’re discussing 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 lovely tough check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that person had to be a staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have actually owned a business but it’s based on you having W-2 employees 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 eligible 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 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 approximately 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the huge question is why does no one know about this since appearance when I initially found out about this when I first fulfilled Josh you understand I have actually got lots of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make lots of numerous financial investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I do not believe it because I utilize 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 and that were well been worthy of and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my politician pals Governor Senators they didn’t know about it I indicate that’s how you know that’s how misinformation 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 real so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin since 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was chaos due to the fact that remember in the initial cares act you could not do 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 refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly she or he’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 accountant no your accountant’s never ever done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has actually been in business given that 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate clients have worked with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker 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 up to $10,000 in salaries paid by an.
company whose organization is fully or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Schedule.
1. The credit is offered to all companies despite size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that specialize in ERC filing assistance usually supply know-how and support to help companies browse the complex procedure of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Q2 2021
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based on elements such as your market, earnings, and operations. They can help determine if you fulfill the requirements for the credit and recognize the maximum credit amount you can declare.
Documentation and Computation: ERC filing services will assist in gathering the necessary documents, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit quantity based upon eligible incomes and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the essential forms and paperwork on your behalf. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually developed over time. These companies remain updated with the most recent changes and ensure that your filings adhere to the most current standards. If the IRS requests additional info or carries out an audit related to your ERC claim, they can likewise offer continuous assistance.
It’s important to research and vet any business offering ERC filing help to guarantee their trustworthiness and knowledge. Try to find established firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who use ERC filing support.
Bear in mind that while these business can provide valuable support, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate organizations to keep and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, employers should meet one of two requirements:.
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 discussed previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified salaries paid to workers, consisting of certain 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, services that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they got a PPP loan. Nevertheless, the same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting eligible 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 tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Form 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually developed with time. The best course of action is to seek advice from a tax professional or check out the main IRS site for the most up-to-date and in-depth info relating to the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a company must fulfill among the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and services that received a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC includes finishing the essential kinds and including the credit on your work income tax return (generally Kind 941). The exact time it takes to process the credit can vary based on a number of aspects, including the complexity of your service and the work of the internal revenue service. It’s suggested to consult with a tax expert for assistance specific to your circumstance.
There are several companies that can help with the procedure of declaring the ERC. Some popular business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon general understanding and may not reflect the most recent updates or modifications to the ERC. It is very important to seek advice from a tax expert or check out the official IRS website for the most precise and current details regarding eligibility, claiming treatments, and readily available support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members typically in 2019, then the credit is.
enabled just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not simply money payments however also a portion of the expense of company.
provided health care. Employee Retention Credit Q2 2021
Payment.
Employers can be right away compensated for the credit by decreasing the quantity of payroll taxes they.