Lets talk first about 2020 Employee Retention Credit Guidelines :
Our group here what do these people doing everyone in this room is assisting teach individuals about ERC and uh constantly supply a gorgeous breakfast and have people actually 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 ‘d like to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I imply you understand if you simply begin to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I indicate think of the number of 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything up until they really receive the money they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been completed and how many you believe you’ve processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’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 essential today the employee retention credit which most of you have actually never ever become aware of I definitely had not heard of it until extremely just recently and found out a lot about it because this is most likely the most affordable expense 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 challenging this isn’t like PPP we just call up your bank supervisor and state give me a loan it does not 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 become yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered 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 distinction right there two 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 okay go on sorry I just need to make sure we got that point I mean that’s a big difference a loan versus money cash I like cash cash that’s what we’re discussing 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 beautiful tough check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works due to the fact that 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 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 actually owned a company but it’s based upon you having W-2 workers 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 eligible 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 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. alright 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 money just how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the mayhem 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 up to five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of money it is now there’s a caution here the PPP cash would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars a person 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 IRS so it’s big certainly now the big concern is why does nobody learn about this since look when I first found out about this when I initially met Josh you know I’ve got lots of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in business owners of which numerous suffered through the pandemic when I first heard about this I called BS I do not think it due to the fact that 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 should have and we utilized them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my political leader friends 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 info out there then a lot of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody know about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin since in the PPP loan process the federal government made it extremely clear that if you desired 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 process procedure that’s all um and here there was mayhem because keep in mind in the original cares act you might not do both programs so if you had actually done PPP you might 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 federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually 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 business your accounting professional no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my company Kevin has been in business because 2009 and we’ve 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 big big corporate customers have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent 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 qualifying incomes paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether a company had, usually, more or less than.
100 employees in 2019.
Business that focus on ERC filing help generally supply competence and assistance to help services browse the complex process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? 2020 Employee Retention Credit Guidelines
Eligibility Evaluation: These business will evaluate your company’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. If you satisfy the requirements for the credit and recognize the optimum credit quantity you can declare, they can help identify.
Documents and Computation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit amount based on eligible wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to identify prospective chances for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the required forms and documents in your place. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have progressed gradually. These business stay upgraded with the current modifications and guarantee that your filings comply with the most existing standards. They can likewise offer continuous support if the internal revenue service demands extra details or carries out an audit related to your ERC claim.
It is necessary to research and veterinarian any company providing ERC filing assistance to guarantee their credibility and knowledge. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who provide ERC submitting support.
Remember that while these business can provide important help, it’s constantly a great concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to retain 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 qualified employers, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To certify, companies must fulfill one of two requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As discussed previously, for 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of certified incomes paid to employees, including specific 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, organizations that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they got a PPP loan. The same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting qualified companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for organizations to modify prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Form 941. The excess can be refunded to the company if the credit exceeds the quantity of work taxes owed.
It is necessary to note that the ERC provisions and eligibility requirements have progressed over time. The very best course of action is to seek advice from a tax professional or visit the main IRS site for the most detailed and up-to-date information relating to the ERC, consisting of any current legal changes or updates.
To receive the ERC, a business must fulfill among the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and services that got a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC includes finishing the necessary kinds and consisting of the credit on your employment income tax return (normally Kind 941). The exact time it takes to process the credit can vary based on a number of aspects, including the complexity of your business and the work of the IRS. It’s recommended to consult with a tax expert for assistance specific to your situation.
There are numerous companies that can assist with the procedure of declaring the ERC. Some popular business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on basic knowledge and may not reflect the most current updates or changes to the ERC. It is necessary to seek advice from a tax professional or go to the official internal revenue service website for the most current and accurate info relating to eligibility, claiming procedures, and offered help.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on wages paid to all employees whether they really worked or not. Simply put, even if the.
workers worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
allowed only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but likewise a portion of the expense of employer.
provided health care. 2020 Employee Retention Credit Guidelines
Companies can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.