Lets talk first about Gross Receipts Test For Employee Retention Credit 2021 :
Our team here what do these people doing everybody in this space is assisting teach people about ERC and uh always offer a gorgeous breakfast and have people truly discover the program we need to head to the space where we have the ability to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I suggest you know if you just start to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I suggest think of the number of real customers that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified 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
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually receive the money they do not 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 really rely on Wonder trust that the procedure has been finished and the number of you think you’ve processed given that you started this we have to do with 35 000 of these for
about six 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 truly important today the employee retention credit which most of you have never ever become aware of I definitely hadn’t heard of it up until really recently and learned a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees 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 Concepts 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 state offer me a loan it doesn’t 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used services three 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.
correct the cash money payroll tax refund fine go on sorry I simply have to make certain we got that point I suggest that’s a big distinction a loan versus money money I like money cash that’s what we’re talking about okay 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 beautiful 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 since it sounds like to me if it’s a if it’s employee retention credit that person needed to be an employee 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 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. so 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 need to be on payroll for the first six months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you return per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per employee 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 occur um they simply changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished to even get more to keep those employees 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 happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of cash it is now there’s a caution here the PPP cash would have to be lowered from the twenty 6 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 cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the huge question is why does no one learn about this due to the fact that look when I first became aware of this when I first fulfilled Josh you understand I’ve got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous lots of investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not believe it due to the fact that I utilize 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 and that were well should have and we utilized them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my political leader pals Governor 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 individuals informed 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 employee retention credit you understand what’s interesting you’re talking 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 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 procedure 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 might not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because 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 understand how to do this not actually he or she’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this company and bottom line my company Kevin has actually been in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge business customers have worked with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal 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 business is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether an employer had, typically, basically than.
100 employees in 2019.
Business that concentrate on ERC filing support typically supply knowledge and assistance to help companies navigate the complicated procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Gross Receipts Test For Employee Retention Credit 2021
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based on factors such as your industry, profits, and operations. They can assist determine if you satisfy the requirements for the credit and recognize the maximum credit amount you can declare.
Documentation and Estimation: ERC filing services will help in collecting the required documentation, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit quantity based on qualified wages and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your past payroll records and financials to identify possible chances for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed kinds and paperwork on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually progressed in time. These business remain updated with the latest changes and guarantee that your filings abide by the most present guidelines. They can likewise offer ongoing support if the IRS requests additional information or conducts an audit related to your ERC claim.
It’s important to research and vet any company offering ERC filing assistance to ensure their credibility and proficiency. Search for established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who offer ERC submitting support.
Bear in mind that while these companies can supply important support, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to keep and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, companies need to satisfy one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a significant decline is defined as a 20% decline in gross invoices compared to the 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% decline in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified earnings paid to employees, including particular health plan costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. Nevertheless, the exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, allowing qualified companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, usually Form 941. The excess can be refunded to the employer if the credit exceeds the quantity of work taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have actually developed over time. The best course of action is to seek advice from a tax expert or go to the main IRS website for the most comprehensive and updated details concerning the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a business needs to satisfy among the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline 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 readily available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For example, government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC involves completing the required types and including the credit on your employment tax return (usually Type 941). The exact time it takes to process the credit can vary based upon a number of elements, consisting of the intricacy of your organization and the work of the IRS. It’s recommended to talk to a tax professional for assistance specific to your circumstance.
There are several companies that can aid with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these companies directly to inquire about their fees and services.
Please note that the info supplied here is based upon basic knowledge and may not show the most current updates or modifications to the ERC. It’s important to consult with a tax expert or check out the official internal revenue service website for the most up-to-date and accurate information relating to eligibility, claiming procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on incomes paid to all employees whether they actually worked or not. To put it simply, even if the.
workers worked full time and got paid 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.
permitted just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments but likewise a portion of the cost of employer.
supplied health care. Gross Receipts Test For Employee Retention Credit 2021
Employers can be right away compensated for the credit by minimizing the quantity of payroll taxes they.