Lets talk first about Q4 2021 Employee Retention Credit :
Our team here what do these men doing everybody in this room is assisting teach people about ERC and uh always supply a lovely breakfast and have individuals really find out about the program we should head to the room where we have the ability to display a few of the checks that we are getting for business 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 duplicate 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 look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply consider how many real clients 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 internal revenue service heading to the client so that’s how you have the ability to track it you know when you
receive this you understand the check is opted for sure and that’s when they pay so they don’t pay anything until they actually receive the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their savings account and they can really trust Wonder trust that the process has been ended up and the number of you believe you have actually processed because you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you need 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 Terrific here you’re at my YouTube channel we’re discussing something truly important today the employee retention credit which most of you have actually never become aware of I definitely hadn’t become aware of it up until extremely just recently and found out a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers in 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 hard this isn’t like PPP we just call your bank supervisor and state give 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 love this program it’s going away soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services three 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 distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund fine go on sorry I simply have to make certain we got that point I mean that’s a big distinction a loan versus cash cash I like money money 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 lovely tough check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s employee retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have actually owned a business but it’s based upon you having W-2 staff members 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 very first six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll 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. all right 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 money just how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that take place um they just altered 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 as much as five thousand Max and after that what happens 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 staff member that is because that’s a lot of money it is now there’s a caution here the PPP money would need to be lowered 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 usually 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 employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the big question is why does nobody understand about this due to the fact that appearance when I initially found out about this when I first fulfilled Josh you know I have actually got lots of investments in lots of companies I’m a major supporter for entrepreneurship in America and make many lots of financial investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t think it due to the fact that I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my political leader buddies Guv Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people 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 learn about the worker retention credit you understand what’s interesting you’re speaking about the banks Kevin because in the PPP loan process 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 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 since keep in mind in the initial cares act you could refrain from doing both programs so if you had 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 federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional 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 stayed in business given that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have dealt 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 home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Availability.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of certifying salaries differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing assistance typically offer knowledge and assistance to help organizations browse the intricate process of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Q4 2021 Employee Retention Credit
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based on aspects such as your market, income, and operations. They can help determine if you meet the requirements for the credit and determine the optimum credit quantity you can declare.
Documents and Estimation: ERC filing services will help in collecting the needed paperwork, such as payroll records and financial statements, to support your claim. They will also assist compute the credit quantity based on eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify potential chances for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the essential forms and documents in your place. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These companies stay updated with the latest changes and guarantee that your filings abide by the most current guidelines. If the IRS requests extra details or conducts an audit related to your ERC claim, they can also supply ongoing support.
It is very important to research study and veterinarian any business offering ERC filing help to guarantee their reliability and knowledge. Look for established companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who provide ERC filing support.
Remember that while these companies can supply valuable help, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to retain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies must meet one of two criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out previously, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline 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.
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 certified wages paid to workers, consisting of particular health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. The exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for organizations to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Form 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have progressed gradually. The very best strategy is to consult with a tax professional or check out the main internal revenue service site for the most comprehensive and updated info relating to the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a company should meet among the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant 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 right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC includes finishing the needed forms and including the credit on your employment tax return (usually Type 941). The exact time it takes to process the credit can differ based on a number of factors, consisting of the complexity of your business and the work of the IRS. It’s recommended to seek advice from a tax expert for guidance particular to your scenario.
There are several companies that can assist with the procedure of claiming the ERC. Some popular companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon general understanding and might not show the most recent updates or modifications to the ERC. It is essential to consult with a tax expert or go to the main internal revenue service site for the most accurate and updated details concerning eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on wages paid to all employees whether they actually worked or not. Simply put, even if the.
employees 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 workers on average in 2019.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but likewise a portion of the expense of employer.
provided healthcare. Q4 2021 Employee Retention Credit
Payment.
Companies can be right away repaid for the credit by reducing the amount of payroll taxes they.