Lets talk first about 3Rd Quarter 2021 Employee Retention Credit :
Our team here what do these men doing everybody in this room is helping teach individuals about ERC and uh constantly offer a beautiful breakfast and have people actually discover the program we must head to the room where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I indicate you know if you just 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 simply I imply think about the number of actual customers that went through the program yeah this is the very end this is the celebration 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 have the ability to track it you know when you
receive this you know the check is gone for sure which’s when they pay so they don’t pay anything till they in fact receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer 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 six billion dollars wow so clearly they know what they’re doing which’s what you require you need experts on the other end of the phone to process this and get it to where you get among these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something truly important today the worker retention credit which the majority of you have actually never ever heard of I certainly had not become aware of it up until extremely just recently and learned a lot about it due to the fact that this is most likely the lowest cost 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 Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call 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 tell us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big 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 money payroll tax refund alright go on sorry I simply need to make sure we got that point I imply that’s a huge distinction a loan versus cash money I like money money 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 IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s worker retention credit that individual had to be an employee 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 owned a business however it’s based on you having W-2 employees 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 very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage 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 employees 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 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 cash it is now there’s a caveat here the PPP money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big concern is why does nobody know about this because look when I first heard about this when I initially satisfied Josh you know I have actually got great deals of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous numerous 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 since I utilize 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 been worthy of and we utilized them sensibly to stay alive during the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even called to my politician pals Guv Senators they didn’t know about it I imply that’s how you know that’s how misinformation is that there’s no info out there then a bunch 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 learn about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin because 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 huge 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 simply procedure process that’s all um and here there was mayhem since keep in mind in the initial cares act you might refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’s never ever 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 business your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big huge business clients have dealt with bottom line to recover other government programs we have actually 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 federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose company is fully or partly suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes differs by whether an employer had, typically, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help typically offer expertise and assistance to assist companies navigate the intricate process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? 3Rd Quarter 2021 Employee Retention Credit
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. If you meet the requirements for the credit and identify the maximum credit amount you can declare, they can help figure out.
Paperwork and Estimation: ERC filing services will help in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit amount based upon eligible incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you change previous tax returns to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the required kinds and documentation on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have progressed over time. These companies stay upgraded with the most recent modifications and ensure that your filings abide by the most current guidelines. They can likewise provide ongoing assistance if the internal revenue service requests additional info or performs an audit related to your ERC claim.
It’s important to research and vet any business providing ERC filing assistance to ensure their reliability and competence. Look for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who provide ERC submitting support.
Remember that while these companies can offer valuable help, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure accurate 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 measures. The objective of the ERC is to motivate services to maintain and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, companies should satisfy one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As mentioned previously, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of certified wages paid to staff members, consisting of particular health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. The same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, allowing qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Form 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have developed gradually. The very best strategy is to seek advice from a tax professional or go to the main IRS site for the most detailed and current info concerning the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a service must meet one of the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified 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.
The ERC is available to businesses of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and services that received a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC includes completing the required kinds and including the credit on your employment tax return (usually Form 941). The exact time it requires to process the credit can differ based on numerous factors, consisting of the complexity of your service and the workload of the IRS. It’s recommended to seek advice from a tax expert for assistance particular to your circumstance.
There are several business that can assist with the process of declaring the ERC. Some well-known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on basic understanding and might not show the most current updates or modifications to the ERC. It’s important to talk to a tax professional or visit the main IRS site for the most updated and accurate info relating to eligibility, declaring procedures, and available support.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on earnings paid to all workers whether they actually worked or not. Simply put, even if the.
employees worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
enabled only for wages paid to employees who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply money payments but also a part of the expense of employer.
supplied health care. 3Rd Quarter 2021 Employee Retention Credit
Employers can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.