Lets talk first about How To Claim The Employee Retention Credit For 2020 :
Our group here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh constantly provide a beautiful breakfast and have people really learn 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 wish to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you simply begin to take a look at some 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 suggest consider how many real customers 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 know when you
receive this you know the check is gone for sure and that’s when they pay so they do not pay anything until they in fact get the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their checking account and they can really rely on Wonder trust that the process has been finished and how many you believe you have actually processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need 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 Wonderful here you’re at my YouTube channel we’re speaking about something really important today the worker retention credit which most of you have actually never heard of I definitely hadn’t become aware of it till very just recently and discovered a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call up your bank manager and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform 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 enjoy this program it’s going away very soon you got to learn everything about it let’s talk employee 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 offered businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I simply need to make certain we got that point I indicate that’s a big difference a loan versus cash money I like money money that’s what we’re discussing 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 lovely tough check in the mail where you get real money from the IRS all right so let’s speak about how it works due to the fact that it seems 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 cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have actually owned an organization but it’s based upon you having W-2 staff members 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 eligible 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 6 quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. okay 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 how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the turmoil 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 five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a lot of money it is now there’s a caution here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower 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 say 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 IRS so it’s substantial certainly now the big question is why does no one know about this because appearance when I initially heard about this when I initially satisfied Josh you know I have actually got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which many 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 cash 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 been worthy of and we used them carefully to stay alive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t learn about it I imply that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin since 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 huge 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 just process process that’s all um and here there was mayhem because keep in mind in the initial cares act you could refrain from doing 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 not doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity 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 created to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose company is completely or partly suspended.
decline by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of an equivalent 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 certifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support usually offer know-how and support to assist organizations navigate the complex process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? How To Claim The Employee Retention Credit For 2020
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based upon elements such as your market, income, and operations. If you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim, they can help figure out.
Documents and Estimation: ERC filing services will assist in gathering the essential documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit quantity based on eligible salaries and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the necessary kinds and documentation on your behalf. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have progressed with time. These business stay upgraded with the most recent modifications and make sure that your filings comply with the most present guidelines. They can likewise supply continuous assistance if the internal revenue service demands extra information or conducts an audit related to your ERC claim.
It is very important to research and veterinarian any business offering ERC filing help to guarantee their trustworthiness and know-how. Search for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who use ERC submitting assistance.
Keep in mind that while these companies can supply important support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage organizations to keep and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, employers should meet one of two criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out previously, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts 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 qualified salaries paid to workers, consisting of 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: At first, companies that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they got a PPP loan. However, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, permitting eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the company.
It’s important to note that the ERC arrangements and eligibility criteria have actually evolved in time. The best strategy is to seek advice from a tax expert or check out the official IRS site for the most updated and comprehensive details regarding the ERC, including any current legal changes or updates.
To receive the ERC, an organization should fulfill among the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified 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 immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, however there are some exceptions. For example, federal government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC involves completing the required kinds and including the credit on your employment income tax return (usually Form 941). The exact time it requires to process the credit can differ based upon numerous aspects, consisting of the intricacy of your company and the work of the internal revenue service. It’s recommended to seek advice from a tax professional for guidance particular to your circumstance.
There are numerous companies that can assist with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll provider. Some popular companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and get in touch with these companies straight to ask about their services and charges.
Please note that the info supplied here is based upon general knowledge and may not reflect the most recent updates or modifications to the ERC. It is very important to speak with a tax professional or visit the main internal revenue service website for the most up-to-date and precise information relating to eligibility, claiming treatments, and readily available assistance.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on incomes paid to all staff members whether they really worked or not. To put it simply, even if the.
employees worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
enabled only for wages paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not simply cash payments but also a portion of the cost of employer.
supplied healthcare. How To Claim The Employee Retention Credit For 2020
Companies can be immediately compensated for the credit by reducing the amount of payroll taxes they.