Lets talk first about Employee Retention Credit 2021 Eligible Employer :
Our group here what do these people doing everybody in this space is helping teach people about ERC and uh constantly supply a gorgeous breakfast and have people really learn more about the program we need to head to the room where we are able to display some of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I imply you understand if you just start to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I imply think about how many actual 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 validated 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 know when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything until they actually receive the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their checking account and they can really trust Wonder trust that the process has been finished and how many you believe you have actually processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you require experts 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 discussing something actually crucial today the staff member retention credit which most of you have actually never ever heard of I definitely had not become aware of it up until extremely just recently and found out a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the expert 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 hard 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 ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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.
fix the cash cash payroll tax refund okay go on sorry I just need to ensure we got that point I indicate that’s a big difference a loan versus cash cash I like money money that’s what we’re talking about 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 stunning tough check in the mail where you get real cash from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned an organization however it’s based upon you having W-2 workers 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 correct 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 three of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary 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 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 up to 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of money it is now there’s a caution here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the huge question is why does nobody know about this since look when I initially heard about this when I first fulfilled 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 many investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it due to the fact that I use 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 and that 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 but when I dug around I even called to my political leader good friends Governor Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told 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 understand what’s intriguing you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you wanted 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 simply process process that’s all um and here there was mayhem due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it previously 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 business your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this organization 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 federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, company whose business is fully or partly suspended.
decline by more than 50%.
Accessibility.
1. The credit is offered to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount 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 before December 31, 2020.
The definition of qualifying wages differs by whether a company had, usually, basically than.
100 workers in 2019.
Companies that focus on ERC filing assistance normally provide expertise and support to assist businesses browse the intricate process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Eligible Employer
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based on aspects such as your market, revenue, and operations. They can help determine if you satisfy the requirements for the credit and identify the maximum credit quantity you can claim.
Documentation and Calculation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit amount based upon qualified wages and other certifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine prospective opportunities for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the required kinds and paperwork on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually developed over time. These business stay updated with the latest modifications and make sure that your filings comply with the most present guidelines. They can likewise provide continuous assistance if the IRS requests additional info or performs an audit related to your ERC claim.
It is very important to research and veterinarian any business offering ERC filing assistance to ensure their reliability and knowledge. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who offer ERC filing assistance.
Keep in mind that while these business can offer valuable help, it’s constantly a good idea 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 procedures. The objective of the ERC is to encourage companies to keep and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, employers need to fulfill one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned previously, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified incomes paid to workers, including certain health insurance 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: At first, companies 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 businesses to claim the ERC even if they got a PPP loan. The exact same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for organizations to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, normally Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC provisions and eligibility requirements have evolved gradually. The very best course of action is to speak with a tax professional or check out the main internal revenue service website for the most up-to-date and detailed details regarding the ERC, consisting of any recent legal changes or updates.
To receive the ERC, a business needs to fulfill one of the following criteria:.
The 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. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and companies that received a PPP loan might have constraints on declaring the credit.
The process for claiming the ERC includes finishing the required forms and consisting of the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can vary based on a number of factors, including the complexity of your business and the work of the IRS. It’s suggested to speak with a tax expert for assistance particular to your situation.
There are numerous business that can help with the procedure of claiming the ERC. Some well-known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based upon basic understanding and may not show the most recent updates or changes to the ERC. It is necessary to seek advice from a tax expert or check out the official internal revenue service site for the most up-to-date and accurate details relating to eligibility, claiming treatments, and available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on earnings paid to all staff members whether they in fact worked or not. To put it simply, even if the.
employees worked full time and made money 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.
permitted just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not just money payments however also a part of the cost of employer.
supplied health care. Employee Retention Credit 2021 Eligible Employer
Payment.
Employers can be immediately repaid for the credit by minimizing the quantity of payroll taxes they.