Lets talk first about Employee Retention Credit 2020 Amended 941 :
Our team here what do these men doing everyone in this room is helping teach individuals about ERC and uh always provide a stunning breakfast and have individuals really discover the program we need to head to the room where we are able to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you just begin to look at some 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 imply think of how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you know when you
get this you know the check is gone for sure which’s when they pay so they do not pay anything until they actually get the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their bank account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you believe you’ve processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you need specialists 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 actually essential today the staff member retention credit which the majority of you have never heard of I certainly hadn’t heard of it until very just recently and found out a lot about it since this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the specialist 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 phone your bank manager 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 us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created 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 practically everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund alright go on sorry I simply have to make certain we got that point I suggest that’s a huge difference a loan versus money cash I like money 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 beautiful hard check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed 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 service however it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 staff members 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 right so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 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 get back per employee 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 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to an optimum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus because 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 approximately five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a lot of money it is now there’s a caution here the PPP cash would need to be decreased from the twenty 6 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 cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge certainly now the huge concern is why does no one know about this due to the fact that appearance when I first became aware of this when I initially met Josh you know I have actually got great deals of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make many numerous investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I do not think 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 which were well been worthy of and we used them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my political leader friends Governor Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin since 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 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 chaos because remember in the initial cares act you might not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not truly she or he’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 company your accountant no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my company 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 companies so a great deal of our huge huge business clients have actually worked with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee 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 earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose company is completely or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by 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. As soon as the.
company’s gross invoices go above 80% of an equivalent 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 certifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether an employer had, typically, basically than.
100 employees in 2019.
Business that concentrate on ERC filing help usually supply know-how and assistance to help organizations browse the intricate procedure of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2020 Amended 941
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can claim, they can assist identify.
Documentation and Computation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit quantity based on eligible salaries and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine possible chances for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the essential types and documentation in your place. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have evolved over time. These companies remain upgraded with the current changes and make sure that your filings adhere to the most current standards. If the IRS requests additional details or performs an audit associated to your ERC claim, they can likewise provide continuous assistance.
It is essential to research and vet any company using ERC filing support to ensure their reliability and know-how. Search for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who provide ERC filing support.
Bear in mind that while these companies can provide valuable support, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to maintain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies need to fulfill one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As mentioned earlier, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of certified wages paid to employees, consisting of particular health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, enabling qualified employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to change prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Type 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC provisions and eligibility criteria have actually developed in time. The very best course of action is to talk to a tax expert or check out the official IRS site for the most comprehensive and updated information relating to the ERC, consisting of any recent legal changes or updates.
To receive the ERC, a business should satisfy among the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the 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 receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and services that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC involves completing the needed types and consisting of the credit on your employment tax return (normally Form 941). The exact time it takes to process the credit can differ based upon numerous elements, consisting of the complexity of your business and the work of the IRS. It’s suggested to seek advice from a tax professional for guidance particular to your circumstance.
There are several companies that can assist with the process of claiming the ERC. Some popular companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on general understanding and may not show the most recent updates or changes to the ERC. It is very important to speak with a tax expert or visit the main IRS website for the most current and precise info regarding eligibility, claiming treatments, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all employees whether they really 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 workers on average in 2019.
allowed just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just money payments however also a portion of the cost of employer.
provided healthcare. Employee Retention Credit 2020 Amended 941
Employers can be right away reimbursed for the credit by reducing the quantity of payroll taxes they.