Lets talk first about Employee Retention Credit 2021 American Rescue Plan :
Our team here what do these people doing everybody in this room is helping teach people about ERC and uh constantly supply a lovely breakfast and have individuals really learn more about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I imply you understand if you simply 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 suggest it’s just I imply think about how many real customers 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 verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything till they really get the money they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their checking account and they can really trust Wonder trust that the process has been completed and the number of you believe you’ve processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you need you need professionals 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 Wonderful here you’re at my YouTube channel we’re discussing something really essential today the worker retention credit which the majority of you have actually never become aware of I definitely hadn’t become aware of it up until very just recently and learned a lot about it due to the fact that this is most likely the lowest expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply phone 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 tell all of us 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 learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody 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.
fix the money cash payroll tax refund okay go on sorry I simply need to ensure we got that point I suggest that’s a big distinction 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 beautiful tough check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s staff member retention credit that individual had to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have owned a service however it’s based on you having W-2 workers in America not 10.99. 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 first six months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that take place um they just altered 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 staff members 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 after that what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be lowered 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 typically Kevin is if you took PPP cash somewhere around ten 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 undoubtedly now the huge concern is why does no one understand about this since look when I initially became aware of this when I initially satisfied Josh you know I have actually got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make lots of many investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I don’t believe it due to the fact that 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 been worthy of and we utilized them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t learn about it I suggest that’s how you know that’s how false information is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP also 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 talking about the banks Kevin since in the PPP loan procedure the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 just procedure procedure that’s all um and here there was chaos due to the fact that remember in the initial cares act you could 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 government never made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this service and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have dealt with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose business is fully or partly suspended.
decline by more than 50%.
Availability.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings differs by whether a company had, on average, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance typically offer knowledge and assistance to help organizations navigate the complicated procedure of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2021 American Rescue Plan
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can claim, they can assist identify.
Documents and Computation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based on eligible earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to identify prospective chances for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the necessary types and documentation in your place. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have developed in time. These companies remain upgraded with the current modifications and guarantee that your filings abide by the most current standards. They can also offer ongoing assistance if the internal revenue service demands extra details or performs an audit related to your ERC claim.
It’s important to research study and vet any company offering ERC filing assistance to ensure their reliability and expertise. Try to find established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC filing assistance.
Keep in mind that while these companies can supply important help, it’s constantly a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure 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 goal of the ERC is to encourage companies to retain 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 eligible employers, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, companies need to fulfill one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a considerable decline is specified as a 20% decline 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 invoices compared to the same quarter in 2019, or a 20% decline in gross receipts 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 is equal to a portion (up to 70%) of qualified earnings paid to workers, including particular health insurance expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. The exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, allowing eligible companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for organizations to modify prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, generally Kind 941. The excess can be refunded to the company if the credit exceeds the amount of work taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have evolved in time. The best strategy is to consult with a tax expert or check out the official IRS website for the most comprehensive and current information regarding the ERC, consisting of any recent legal changes or updates.
To receive the ERC, a business must meet one of the following criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and businesses that received a PPP loan might have constraints on claiming the credit.
The process for declaring the ERC includes completing the needed forms and consisting of the credit on your employment tax return (typically Kind 941). The exact time it takes to process the credit can vary based upon a number of elements, including the complexity of your company and the workload of the IRS. It’s suggested to speak with a tax expert for guidance particular to your situation.
There are several business that can assist with the procedure of declaring the ERC. Some widely known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon general knowledge and may not reflect the most current updates or changes to the ERC. It’s important to speak with a tax expert or go to the main IRS website for the most current and accurate information regarding eligibility, claiming treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all employees whether they really worked or not. To put it simply, even if the.
staff members worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees usually in 2019, then the credit is.
enabled only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments but also a part of the expense of company.
offered healthcare. Employee Retention Credit 2021 American Rescue Plan
Payment.
Companies can be right away reimbursed for the credit by minimizing the quantity of payroll taxes they.