Lets talk first about Employee Retention Credit 2020 Tax Return :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly supply a stunning breakfast and have people truly learn more about the program we should head to the room where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I mean you know if you simply begin to 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 mean it’s simply I imply consider the number of real customers that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand 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 up until this letter is confirmed the check is on the method they transfer it into their checking account and they can really trust Wonder trust that the procedure has actually been finished and the number of you believe you’ve processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require you need specialists 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually important today the employee retention credit which most of you have never ever heard of I certainly had not become aware of it up until very recently and found out a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have staff members 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 challenging this isn’t like PPP we simply contact your bank manager 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 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 disappearing very soon you got to discover everything about it let’s talk staff member 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 offered businesses 3 chances 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 two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund okay go on sorry I simply have to make sure we got that point I mean that’s a huge difference a loan versus money cash I like money cash that’s what we’re discussing 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 gorgeous difficult check in the mail where you get real money from the IRS all right so let’s discuss how it works since 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 money is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have actually owned an organization but it’s based on you having W-2 workers in America not 10.99. so 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 need to be on payroll for the 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 three and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash just how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum 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 approximately five thousand Max and after that what takes place 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 since that’s a lot of money it is now there’s a caution here the PPP money would need to be reduced from the twenty six 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 somewhere around 10 thousand dollars a person so let’s say 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 IRS so it’s substantial certainly now the huge concern is why does nobody understand about this because appearance when I first became aware of this when I initially fulfilled Josh you know I’ve got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t think it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well should have and we used them sensibly to survive throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even called to my politician buddies Governor Senators they didn’t know about it I suggest that’s how you know that’s how false information is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure 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 procedure that’s all um and here there was turmoil because remember in the original cares act you might not do both programs so if you had 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 since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not really she or he’s never done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by government order due to COVID-19.
during 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 a comparable 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 salaries paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing assistance generally provide competence and support to assist companies browse the intricate process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2020 Tax Return
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based on aspects such as your market, profits, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can declare, they can assist identify.
Documents and Computation: ERC filing services will assist in collecting the necessary documents, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit amount based upon eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can review your previous payroll records and financials to determine potential opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the required types and documents in your place. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have developed gradually. These companies stay updated with the latest changes and ensure that your filings adhere to the most existing guidelines. They can also offer continuous assistance if the internal revenue service demands additional info or performs an audit related to your ERC claim.
It’s important to research and veterinarian any company providing ERC filing assistance to ensure their trustworthiness and competence. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who provide ERC filing support.
Remember that while these companies can offer valuable support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee accurate filings.
The Worker 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 encourage businesses to maintain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, companies must meet one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed previously, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of qualified wages paid to workers, including certain health insurance costs. The optimum 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 received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they got a PPP loan. Nevertheless, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, permitting eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, generally Type 941. The excess can be refunded to the company if the credit surpasses the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually progressed over time. The very best strategy is to consult with a tax expert or check out the main internal revenue service site for the most updated and comprehensive information concerning the ERC, including any recent legal modifications or updates.
To get approved for the ERC, a service must fulfill one of the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decrease in gross receipts 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 exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. For example, federal government entities and companies that received a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC involves completing the necessary types and including the credit on your work tax return (generally Type 941). The exact time it requires to process the credit can vary based upon numerous aspects, consisting of the complexity of your business and the work of the IRS. It’s suggested to consult with a tax expert for guidance particular to your situation.
There are several business that can assist with the procedure of claiming the ERC. Some popular business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based on basic understanding and may not reflect the most recent updates or modifications to the ERC. It’s important to consult with a tax professional or visit the official internal revenue service website for the most up-to-date and accurate information regarding eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all staff members whether they actually worked or not. To put it simply, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed only for salaries paid to workers who did not work during the calendar quarter.
In both cases, “salaries” includes not simply money payments however also a part of the expense of company.
supplied health care. Employee Retention Credit 2020 Tax Return
Employers can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.