Lets talk first about Employee Retention Credit 2021 Partial Shutdown :
Our team here what do these guys doing everyone in this space is assisting teach people about ERC and uh constantly offer a lovely breakfast and have individuals truly learn more about the program we need to head to the space where we are able to show 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 literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I imply you know if you simply start 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 think about how many real customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS 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 don’t pay anything until they actually get the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their checking account and they can genuinely rely on Wonder trust that the process has actually been finished and how many you think you have actually processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you require 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 Fantastic here you’re at my YouTube channel we’re discussing something really important today the employee retention credit which the majority of you have never heard of I definitely had not become aware of it up until extremely just recently and found out a lot about it since this is most likely the lowest expense 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 specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank manager and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund fine go on sorry I just need to make certain we got that point I suggest that’s a huge distinction a loan versus cash money I like money cash 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real money from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s employee retention credit that person needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have owned a business but it’s based upon you having W-2 staff members 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 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part cash how much can you return per worker 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 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that occur 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 five thousand Max and after that what occurs 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 six thousand dollars per worker that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the big question is why does no one know about this because appearance when I first heard about this when I first satisfied Josh you understand I’ve got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I do not think it because I utilize the PPP we went through the money 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 deserved and we utilized them sensibly 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 contacted us to my politician pals Guv Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no info 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 real so let’s ask Josh why does nobody learn about the staff member retention credit you know what’s intriguing you’re talking 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 process process that’s all um and here there was chaos due to the fact that keep in mind in the original 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 changed 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 made it clear to any person about how to.
do this does your CFO know how to do this not truly she or he’s never 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 company your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my firm Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity 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 created to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose business is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
only 2 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 satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. As soon as the.
company’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 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 meaning of qualifying incomes varies by whether a company had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing help generally provide knowledge and assistance to help services navigate the complex process of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Partial Shutdown
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on factors such as your industry, earnings, and operations. They can assist identify if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Documentation and Computation: ERC filing services will help in gathering the required documents, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit amount based upon qualified salaries and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to identify potential chances for retroactive credits. They can assist you amend previous tax returns to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the essential types and paperwork in your place. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have developed gradually. These companies remain upgraded with the most recent changes and make sure that your filings comply with the most current guidelines. They can also supply ongoing assistance if the IRS requests additional info or carries out an audit related to your ERC claim.
It is essential to research and vet any company offering ERC filing assistance to guarantee their reliability and competence. Try to find recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who use ERC filing assistance.
Bear in mind that while these companies can provide valuable assistance, it’s always a good idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage companies to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies should fulfill one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As pointed out earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact 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 invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of certified earnings paid to employees, consisting of certain health insurance expenses. 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, services that got an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. Nevertheless, the very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to change prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have progressed with time. The best course of action is to speak with a tax professional or visit the official internal revenue service site for the most up-to-date and detailed information relating to the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, an organization must fulfill one of the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross receipts 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 companies, however there are some exceptions. For instance, federal government entities and companies that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves completing the essential kinds and consisting of the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can vary based on a number of aspects, consisting of the intricacy of your business and the work of the internal revenue service. It’s suggested to consult with a tax expert for assistance specific to your situation.
There are numerous business that can aid with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and get in touch with these companies directly to inquire about their services and costs.
Please note that the info supplied here is based upon general understanding and may not show the most current updates or changes to the ERC. It is essential to speak with a tax professional or go to the main internal revenue service website for the most current and accurate info regarding eligibility, declaring treatments, and readily available support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on wages paid to all workers whether they actually worked or not. In other words, even if the.
staff members worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
permitted just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a part of the cost of employer.
offered healthcare. Employee Retention Credit 2021 Partial Shutdown
Employers can be immediately repaid for the credit by reducing the quantity of payroll taxes they.