Lets talk first about 2021 Employee Retention Credit Rules :
Our team here what do these men doing everybody in this room is assisting teach people about ERC and uh constantly supply a beautiful breakfast and have individuals truly find out about the program we should head to the space where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I indicate you understand if you simply start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I suggest 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 validated the numbers are validated 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
get this you know the check is chosen sure and that’s when they pay so they don’t pay anything till they really receive the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their bank account and they can truly trust Wonder trust that the procedure has been finished and the number of you believe you have actually processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need 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 Wonderful here you’re at my YouTube channel we’re discussing something actually crucial today the employee retention credit which most of you have never become aware of I definitely had not become aware of it until really recently and discovered a lot about it since this is probably the lowest expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I have actually 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 not easy this isn’t like PPP we just call your bank supervisor and say provide 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 have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to discover all about it let’s talk employee 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 services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I just have to make sure we got that point I indicate that’s a huge difference a loan versus cash money I like cash cash that’s what we’re speaking 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 hard check in the mail where you get real money from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual had to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors 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. so as long as you had W-2 employees 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 6 months of 2021 on the W-2 proper so there were six 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 three of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted to even get more to keep those staff members 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 after that what takes place 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 six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace 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 staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge clearly now the big question is why does no one know about this due to the fact that appearance when I first found out about this when I initially fulfilled Josh you understand I’ve got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of many 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 believe it because I use the PPP we went through the money center Banks to get it it was very 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 throughout the pandemic so when I became aware of this I stated 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 understand about it I imply that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin because in the PPP loan procedure 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 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 chaos because remember in the initial cares act you could not do both programs so if you had done PPP you could not do 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 know how to do this not really he or she’s never done it previously 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 accounting professional no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big huge business clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property 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 approximately $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose business is totally or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the employer has to satisfy 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 company’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether a company had, on average, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help typically provide competence and assistance to help companies browse the complicated procedure of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? 2021 Employee Retention Credit Rules
Eligibility Evaluation: These companies will assess your service’s eligibility for the ERC based on aspects such as your industry, profits, and operations. They can assist determine if you fulfill the requirements for the credit and determine the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will assist in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit amount based upon qualified salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the needed types and documents on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have developed gradually. These business stay updated with the most recent modifications and guarantee that your filings comply with the most present standards. They can also offer ongoing support if the IRS requests additional details or performs an audit related to your ERC claim.
It is necessary to research study and vet any business using ERC filing assistance to ensure their reliability and expertise. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who offer ERC filing assistance.
Bear in mind that while these business can supply valuable assistance, it’s always a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate companies to retain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, companies must fulfill one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: 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 qualified earnings paid to employees, consisting of particular health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. However, the same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, permitting eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for services to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, usually Form 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the employer.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually progressed gradually. The very best strategy is to seek advice from a tax expert or visit the official IRS site for the most detailed and up-to-date info regarding the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a company should meet among the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified 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 immediately preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC includes finishing the required kinds and consisting of the credit on your work income tax return (normally Form 941). The exact time it requires to process the credit can vary based on numerous aspects, consisting of the intricacy of your business and the work of the IRS. It’s advised to seek advice from a tax expert for guidance particular to your circumstance.
There are several companies that can help with the process of claiming the ERC. Some well-known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon basic knowledge and may not show the most recent updates or modifications to the ERC. It is very important to talk to a tax professional or check out the official IRS website for the most accurate and updated information relating to eligibility, claiming procedures, and available support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on wages paid to all employees whether they in fact worked or not. Simply put, even if the.
staff members worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a portion of the cost of employer.
provided health care. 2021 Employee Retention Credit Rules
Companies can be right away compensated for the credit by decreasing the amount of payroll taxes they.