Lets talk first about For 2021 The Employee Retention Credit Is Allowed For :
Our group here what do these people doing everybody in this room is helping teach individuals about ERC and uh always supply a beautiful breakfast and have people truly discover the program we ought to head to the room where we are able to show a few 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 actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I mean you understand if you just start to 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 indicate it’s just I indicate think of how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything till they actually get the cash 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 bank account and they can truly trust Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed since you started this we have to do with 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 need specialists 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 Terrific here you’re at my YouTube channel we’re discussing something really important today the worker retention credit which most of you have actually never ever become aware of I definitely hadn’t become aware of it until really recently and discovered a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the professional 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 difficult this isn’t like PPP we simply call your bank manager and say provide 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 ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used companies 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 big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply have to ensure we got that point I suggest that’s a big difference a loan versus money money I like cash money 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 difficult check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person had to be a worker 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 actually 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 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 first six months of 2021 on the W-2 correct 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 two and three of 2021. all right so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part cash just 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 specific Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that the chaos 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 approximately 5 thousand Max and after that what occurs 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 six thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caution here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York 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 IRS so it’s big clearly now the huge concern is why does nobody understand about this since look when I initially heard about this when I first fulfilled Josh you understand I have actually got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many lots of financial investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I don’t believe it since I use the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my political leader buddies Governor Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody learn about the staff member retention credit you understand what’s intriguing you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was chaos since keep in mind in the original cares act you could not do both programs so if you had actually done PPP you might not do 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 ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never 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 company your accountant no your accountant’s never ever done this before unless you have an account that went into this company and bottom line my firm Kevin has actually been in business since 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have actually worked with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose service is completely or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all employers no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether a company had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing support generally offer competence and support to help businesses browse the complex process of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? For 2021 The Employee Retention Credit Is Allowed For
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based on elements such as your industry, income, and operations. They can help figure out if you meet the requirements for the credit and identify the optimum credit amount you can declare.
Documents and Computation: ERC filing services will help in collecting the required documentation, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit amount based on eligible earnings and other certifying 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 identify potential opportunities for retroactive credits. They can help you change prior income tax return to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the essential forms and documents on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually developed in time. These business stay updated with the latest modifications and ensure that your filings abide by the most current guidelines. If the Internal revenue service requests extra info or performs an audit associated to your ERC claim, they can likewise provide continuous assistance.
It is necessary to research study and vet any company using ERC filing assistance to ensure their trustworthiness and knowledge. Try to find recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who provide ERC filing support.
Keep in mind that while these companies can offer important assistance, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage organizations to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies should satisfy one of two 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 receipts. As discussed previously, 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 considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts 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 (as much as 70%) of qualified salaries paid to employees, consisting of 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, services that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they got a PPP loan. The same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, enabling eligible employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, typically Kind 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the employer.
It is necessary to note that the ERC arrangements and eligibility criteria have actually progressed in time. The very best strategy is to talk to a tax expert or check out the official internal revenue service website for the most comprehensive and up-to-date info regarding the ERC, consisting of any current legislative changes or updates.
To get approved for the ERC, a company should satisfy one of the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that got a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC involves completing the required kinds and including the credit on your work tax return (generally Form 941). The exact time it requires to process the credit can vary based upon several elements, consisting of the complexity of your service and the work of the IRS. It’s recommended to talk to a tax professional for guidance specific to your situation.
There are several business that can help with the procedure of claiming the ERC. Some widely known business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based upon basic understanding and may not show the most current updates or changes to the ERC. It is essential to seek advice from a tax expert or check out the main IRS site for the most accurate and updated info concerning eligibility, declaring procedures, and readily available help.
Less than 100. If the employer had 100 or less employees usually in 2019, then the credit is based.
on earnings paid to all employees whether they really worked or not. Simply put, even if the.
workers worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
permitted just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not just money payments however likewise a part of the expense of employer.
provided health care. For 2021 The Employee Retention Credit Is Allowed For
Companies can be instantly reimbursed for the credit by lowering the amount of payroll taxes they.