Lets talk first about Employee Retention Credit 2020 Qualified Wages :
Our group here what do these guys doing everybody in this space is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals really find out about the program we must head to the space where we are able to display some 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 replicate copies of the letters that go to customers validating that the check is on the way I suggest you know if you just start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I indicate think of the number of real clients 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 validated 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 understand when you
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything until they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their bank account and they can really rely on Wonder trust that the procedure has been ended up and how many you believe you have actually processed because 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 need professionals 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 speaking about something really crucial today the staff member retention credit which the majority of you have never ever become aware of I definitely hadn’t heard of it till extremely recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I have actually got the professional 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 simply phone 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 all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used 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 big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I simply need to make certain we got that point I imply that’s a big difference a loan versus cash money I like money cash that’s what we’re speaking 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 gorgeous hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it sounds 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 money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have owned a business however it’s based on 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 need 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 6 quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the turmoil 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 as much as 5 thousand Max and then 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 staff member that is since 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 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 money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the huge question is why does no one learn about this since appearance when I initially became aware of this when I first satisfied Josh you know I have actually got great deals of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of lots of investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I do not believe it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was really 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 during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my political leader buddies Guv Senators they didn’t understand about it I indicate that’s how you understand that’s how false information is that there’s no details out there then a lot of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin since in the PPP loan process 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 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 procedure that’s all um and here there was turmoil since remember in the original 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 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 truly he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that entered into this company and bottom line my firm Kevin has actually stayed in business because 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, employer whose business is completely or partially suspended.
decrease by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully 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. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether a company had, on average, basically than.
100 staff members in 2019.
Business that specialize in ERC filing help usually supply proficiency and support to help services navigate the complicated process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2020 Qualified Wages
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based upon elements such as your industry, earnings, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can help determine.
Documents and Calculation: ERC filing services will help in collecting the required paperwork, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit amount based upon qualified salaries and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the necessary forms and documents in your place. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved with time. These business stay updated with the most recent modifications and ensure that your filings adhere to the most current standards. If the IRS demands additional details or performs an audit related to your ERC claim, they can also supply continuous support.
It is necessary to research study and veterinarian any company offering ERC filing support to guarantee their credibility and competence. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who offer ERC filing support.
Remember that while these business can offer valuable help, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage companies to keep 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 readily available to qualified employers, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, companies must satisfy one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out earlier, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (up to 70%) of certified salaries paid to staff members, including 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: At first, businesses that got an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, permitting eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC arrangements and eligibility requirements have progressed with time. The very best strategy is to talk to a tax expert or visit the official IRS website for the most current and in-depth details concerning the ERC, including any recent legislative modifications or updates.
To receive the ERC, an organization must fulfill among the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves completing the required kinds and including the credit on your employment tax return (normally Form 941). The exact time it requires to process the credit can differ based upon a number of elements, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to consult with a tax professional for guidance particular to your situation.
There are several companies that can assist with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some widely known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these business directly to inquire about their services and charges.
Please keep in mind that the details provided here is based on basic knowledge and might not reflect the most recent updates or modifications to the ERC. It is necessary to speak with a tax professional or check out the main internal revenue service site for the most current and precise info relating to eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on earnings paid to all workers whether they actually worked or not. Simply put, even if the.
staff members worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
enabled only for wages paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not just money payments but also a portion of the expense of company.
supplied health care. Employee Retention Credit 2020 Qualified Wages
Companies can be right away reimbursed for the credit by lowering the amount of payroll taxes they.