Lets talk first about New Employee Retention Credit Rules 2021 :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly offer a stunning breakfast and have people truly find out about the program we ought to head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I mean you know if you just begin 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 mean it’s simply I suggest think of how many actual 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 internal revenue service heading to the client 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 do not pay anything until they in fact receive the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has been ended up and the number of you believe you’ve processed considering 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 experts 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 Fantastic here you’re at my YouTube channel we’re speaking about something really crucial today the worker retention credit which most of you have actually never ever become aware of I definitely had not become aware of it until very recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call up your bank supervisor and say give me a loan it doesn’t 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’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses 3 opportunities 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 cash payroll tax refund all right go on sorry I simply have to make certain we got that point I suggest that’s a big difference a loan versus money cash I like money cash 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 original cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works because 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 Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you had to have owned a company but it’s based upon you having W-2 employees 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 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since 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 as much as five thousand Max and then 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 6 thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 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 state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big certainly now the huge concern is why does no one learn about this due to the fact that look when I first became aware of this when I initially met Josh you know I have actually got lots of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t believe it since I utilize the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them sensibly to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader buddies 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 told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it really clear that if you desired 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 chaos due to the fact that remember in the initial cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah some 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 business and bottom line my company Kevin has been in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have dealt with bottom line to recuperate 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 government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Since of COVID-19 or whose gross invoices, company whose organization is completely or partially suspended.
decrease by more than 50%.
1. The credit is available to all companies despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether a company had, on average, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support generally offer proficiency and assistance to help organizations navigate the complicated process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? New Employee Retention Credit Rules 2021
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can assist identify if you meet the requirements for the credit and recognize the maximum credit amount you can declare.
Documents and Computation: ERC filing services will help in gathering the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit amount based on qualified wages and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the needed forms and documents on your behalf. This consists of finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed gradually. These companies stay upgraded with the most recent modifications and ensure that your filings comply with the most existing standards. If the IRS requests extra details or conducts an audit associated to your ERC claim, they can also offer continuous support.
It is essential to research study and vet any business offering ERC filing assistance to ensure their trustworthiness and know-how. Look for established 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 provide valuable support, it’s always a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to retain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers should satisfy one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline 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 percentage (as much as 70%) of certified earnings paid to staff members, including particular health insurance expenditures. The maximum 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 received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. Nevertheless, the very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing qualified companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Kind 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It is necessary to note that the ERC arrangements and eligibility criteria have progressed in time. The very best course of action is to speak with a tax professional or visit the main internal revenue service site for the most current and detailed info concerning the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a company needs to satisfy among the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross receipts 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 exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and businesses that received a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC involves finishing the needed kinds and including the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can differ based on numerous aspects, including the intricacy of your company and the workload of the IRS. It’s recommended to consult with a tax expert for assistance particular to your scenario.
There are a number of business that can assist with the process of claiming the ERC. Some widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on general understanding and might not show the most recent updates or modifications to the ERC. It is necessary to speak with a tax expert or check out the official internal revenue service website for the most precise and up-to-date info relating to eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on salaries paid to all employees whether they really worked or not. In other words, even if the.
employees worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
allowed just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however likewise a portion of the expense of employer.
provided health care. New Employee Retention Credit Rules 2021
Employers can be right away reimbursed for the credit by minimizing the quantity of payroll taxes they.