Lets talk first about Employee Retention Credit 2020 Gross Receipts Test :
Our team here what do these people doing everyone in this room is assisting 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 have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I indicate you understand if you simply begin to take a look at a few of these here I indicate 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 about the number of real customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they really receive the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the process has actually been finished and the number of you believe you have actually processed because 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 need you require 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 Wonderful here you’re at my YouTube channel we’re discussing something actually important today the worker retention credit which the majority of you have never ever heard of I certainly had not become aware of it up until very just recently and discovered a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers in between five 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 Concepts 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 up your bank supervisor and state offer 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 become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to discover 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 created the cares Act and the cares act provided services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big distinction 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 okay go on sorry I simply have to ensure we got that point I suggest that’s a big difference a loan versus money cash I like money money that’s what we’re talking 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual cash 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 person had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned an organization but it’s based upon 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 qualified 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 appropriate so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 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 during that duration now let’s talk my preferred part cash 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 exact Kevin is 50 of the staff member’s income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished 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 up to 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of money it is now there’s a caveat here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the huge concern is why does no one understand about this since look when I initially became aware of this when I initially fulfilled Josh you know I’ve got great deals of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many many financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I do not think it since 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 been worthy of and we used them wisely to survive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader pals Governor Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody understand about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 procedure process that’s all um and here there was mayhem due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you might not do ERC in the original program and when they changed 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 know how to do this not actually he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that went into this service and bottom line my firm Kevin has stayed in business since 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 lot of our huge big corporate customers have worked with bottom line to recover 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 federal government programs.
The staff member 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 up to $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, employer whose service is completely or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is fully 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. Once the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether a company had, on average, basically than.
100 workers in 2019.
Business that focus on ERC filing help usually provide expertise and support to help organizations navigate the complex process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2020 Gross Receipts Test
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based on elements such as your industry, profits, and operations. They can help identify if you fulfill the requirements for the credit and identify the optimum credit amount you can claim.
Documentation and Calculation: ERC filing services will assist in gathering the required paperwork, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based on qualified incomes and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your past payroll records and financials to identify possible chances for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the needed forms and paperwork in your place. This includes finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved in time. These companies remain updated with the current modifications and ensure that your filings comply with the most existing guidelines. If the IRS requests additional information or carries out an audit associated to your ERC claim, they can likewise provide continuous support.
It is essential to research study and veterinarian any business providing ERC filing support to guarantee their reliability and know-how. Look for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax professionals who use ERC filing assistance.
Keep in mind that while these companies can provide important support, it’s always a great idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers need to satisfy one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As pointed out previously, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross receipts compared to the 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 quantity amounts to a portion (up to 70%) of qualified incomes paid to employees, including specific 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, organizations that got an Income Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. Nevertheless, the very same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing eligible companies to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Kind 941. The excess can be reimbursed to the company if the credit exceeds the amount of employment taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have progressed in time. The very best strategy is to consult with a tax expert or check out the official IRS website for the most detailed and current info concerning the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, an organization must meet one of the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, government entities and services that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves completing the essential kinds and consisting of the credit on your work tax return (normally Kind 941). The exact time it takes to process the credit can vary based on a number of factors, consisting of the intricacy of your company and the workload of the IRS. It’s advised to consult with a tax expert for assistance specific to your circumstance.
There are numerous companies that can help with the process of declaring the ERC. Some widely known business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based upon basic understanding and may not reflect the most recent updates or modifications to the ERC. It is very important to speak with a tax professional or visit the main internal revenue service website for the most accurate and current details concerning eligibility, claiming treatments, and offered help.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on earnings paid to all staff members whether they really worked or not. In other words, even if the.
employees worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments but likewise a portion of the cost of employer.
provided health care. Employee Retention Credit 2020 Gross Receipts Test
Employers can be immediately reimbursed for the credit by decreasing the quantity of payroll taxes they.