Lets talk first about Employee Retention Credit Q4 2021 :
Our group here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals truly discover the program we should head to the room where we are able to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I mean you know if you simply start to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply think about how many real clients 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 customer so that’s how you’re able to track it you know when you
get this you know the check is gone for sure which’s when they pay so they do not pay anything up until they in fact receive the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the process has actually been completed and how many you think you’ve processed considering that 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 among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something truly essential today the employee retention credit which most of you have actually never ever heard of I definitely hadn’t heard of it till very just recently and discovered a lot about it due to the fact that this is probably the most affordable expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply phone your bank supervisor and state 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’ve become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to find out 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 used organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I just have to ensure we got that point I imply that’s a huge distinction a loan versus money money I like cash cash that’s what we’re discussing 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 difficult check in the mail where you get actual cash 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 staff member retention credit that individual 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 investors it’s for workers right you needed 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 staff members 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 first six months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s income to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the chaos 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 up to 5 thousand Max and then what happens 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 staff member that is because that’s a great deal of money it is now there’s a caution here the PPP money would have to be minimized 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 on average 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 staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the huge question is why does no one understand about this due to the fact that look when I first became aware of this when I first met Josh you understand I’ve got lots of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make lots of numerous investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I do not think 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 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 however when I dug around I even called to my politician buddies Governor Senators they didn’t know about it I indicate that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely clear that if you wanted 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 just process procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the initial program and when they changed 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 government never made it clear to any person about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it before 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 accounting professional’s never done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have worked with bottom line to recover 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 property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Since of COVID-19 or whose gross invoices, company whose company is fully or partially suspended.
decline by more than 50%.
1. The credit is available to all companies regardless of size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 80% of a similar 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 qualifying incomes paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, usually, basically than.
100 workers in 2019.
Business that concentrate on ERC filing assistance usually provide knowledge and support to help companies browse the complex process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Q4 2021
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based on aspects such as your market, profits, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can claim, they can help identify.
Documents and Estimation: ERC filing services will help in gathering the essential documents, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based on qualified salaries and other certifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the necessary types and documents in your place. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually evolved over time. These business stay updated with the most recent modifications and guarantee that your filings adhere to the most current guidelines. If the Internal revenue service requests extra info or carries out an audit related to your ERC claim, they can likewise provide ongoing support.
It is necessary to research study and veterinarian any business offering ERC filing support to guarantee their trustworthiness and competence. Try to find established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC filing assistance.
Remember that while these business can provide important support, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee 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 objective of the ERC is to encourage services to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies should meet one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As pointed out earlier, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified 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 right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of certified incomes paid to staff members, including specific 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: At first, businesses that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. Nevertheless, the exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, allowing eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for organizations to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, normally Type 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of employment taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have progressed over time. The best strategy is to consult with a tax professional or go to the official IRS website for the most up-to-date and comprehensive details concerning the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a company should meet one of the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross receipts 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 very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, 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 procedure for declaring the ERC includes completing the required forms and including the credit on your employment income tax return (generally Form 941). The exact time it takes to process the credit can vary based on several factors, including the intricacy of your organization and the work of the internal revenue service. It’s suggested to speak with a tax professional for guidance particular to your scenario.
There are a number of companies that can assist with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some widely known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these companies straight to ask about their costs and services.
Please note that the information offered here is based on general knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to talk to a tax expert or go to the main internal revenue service website for the most accurate and current details concerning eligibility, declaring procedures, and readily available assistance.
Less than 100. If the employer had 100 or fewer workers typically in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments however likewise a part of the cost of employer.
supplied health care. Employee Retention Credit Q4 2021
Employers can be right away compensated for the credit by minimizing the amount of payroll taxes they.