Lets talk first about Eligibility For Employee Retention Credit 2020 :
Our team here what do these men doing everybody in this room is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals truly find out about the program we need to head to the space where we are able 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 numerous millions of dollars actually 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 know if you just start to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I indicate 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 confirmed the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you understand when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they actually receive the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the process has actually been finished and how many you think you’ve processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 Fantastic here you’re at my YouTube channel we’re speaking about something truly essential today the employee retention credit which the majority of you have never ever heard of I definitely hadn’t become aware of it up until really just recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest 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 state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform us all 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 disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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.
remedy the money money payroll tax refund okay go on sorry I just need to ensure we got that point I indicate that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re talking about all right 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 lovely tough check in the mail where you get actual 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 had to be a worker so I’m going to make the Assumption this cash 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 company however it’s based on 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 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 six months of 2021 on the W-2 proper 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. alright so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s salary 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 seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the mayhem 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 approximately five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of money it is now there’s a caution here the PPP money would have to be reduced 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 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment 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 huge certainly now the big concern is why does nobody learn about this because look when I initially found out about this when I first satisfied Josh you know I’ve got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous many investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I do not believe it since I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well should have and we used them wisely to stay alive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no info out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one know about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it really 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was chaos since keep in mind in the original cares act you might refrain from doing 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 refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it in the past 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 accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate customers have worked 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 property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose company is fully or partially suspended.
decrease by more than 50%.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 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 certifying wages paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, typically, basically than.
100 workers in 2019.
Business that focus on ERC filing assistance typically offer expertise and support to assist services browse the complicated procedure of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? Eligibility For Employee Retention Credit 2020
Eligibility Evaluation: These business will assess your business’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 optimum credit quantity you can declare, they can assist determine.
Paperwork and Calculation: ERC filing services will help in collecting the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you change prior tax returns to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the essential types and documentation on your behalf. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have evolved in time. These companies remain upgraded with the current modifications and ensure that your filings adhere to the most present guidelines. They can also provide ongoing assistance if the internal revenue service requests additional information or conducts an audit related to your ERC claim.
It’s important to research and vet any company offering ERC filing assistance to guarantee their reliability and knowledge. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Remember that while these companies can offer important assistance, it’s always an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate businesses to keep and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, companies need to fulfill one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified salaries paid to staff members, including certain health insurance expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received a Paycheck Protection 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. Nevertheless, the very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, allowing qualified employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to modify prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Kind 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the company.
It is very important to note that the ERC arrangements and eligibility criteria have evolved with time. The best course of action is to speak with a tax professional or check out the official internal revenue service site for the most detailed and current details regarding the ERC, including any current legal modifications or updates.
To get approved for the ERC, a service needs to fulfill one of the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. 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 substantial decline is defined as a 20% decline in gross receipts compared to the 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, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The process for declaring the ERC involves completing the essential forms and consisting of the credit on your work income tax return (generally Form 941). The exact time it takes to process the credit can differ based upon a number of factors, including the intricacy of your company and the work of the IRS. It’s recommended to seek advice from a tax professional for assistance particular to your scenario.
There are numerous business that can help with the procedure of claiming the ERC. Some widely known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon basic knowledge and might not reflect the most current updates or changes to the ERC. It’s important to talk to a tax expert or go to the official internal revenue service website for the most up-to-date and precise information regarding eligibility, claiming treatments, and offered support.
Less than 100. If the employer had 100 or less employees typically in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. To put it simply, 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 employer had more than 100 staff members on average in 2019.
allowed just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments however also a part of the cost of employer.
provided healthcare. Eligibility For Employee Retention Credit 2020
Companies can be right away reimbursed for the credit by lowering the amount of payroll taxes they.