Lets talk first about Employee Retention Credit 2021 Ppp Loan :
Our team here what do these people doing everybody in this space is assisting teach individuals about ERC and uh constantly supply a stunning breakfast and have people actually find out about the program we must head to the room where we have the ability to show some 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 actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I mean you understand if you just 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 imply it’s just I indicate think of 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 validated the numbers are validated 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 know when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything till they really get the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their bank account and they can genuinely trust Wonder trust that the process has been ended up and how many you think you have actually processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require you need experts 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 Fantastic here you’re at my YouTube channel we’re discussing something truly crucial today the employee retention credit which the majority of you have actually never ever heard of I certainly had not heard of it till really recently and discovered a lot about it since this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members in 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 Ideas 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 simply phone your bank supervisor and state provide me a loan it doesn’t 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 have actually become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to find out all 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 came up with the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I just have to ensure we got that point I suggest that’s a huge distinction a loan versus cash cash I like money cash that’s what we’re speaking about okay 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 difficult check in the mail where you get actual 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 had to be a worker 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 staff members right you had to have owned a business but 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 qualified 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 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. all right so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wanted to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you come up with twenty six 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 lot of money it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce 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 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the huge question is why does no one know about this due to the fact that look when I initially found out about this when I initially met Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of many investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think it due to the fact that I use 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 and that were well should have and we utilized them wisely to stay alive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t know about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody know about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin because 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 big 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 simply procedure process that’s all um and here there was turmoil because remember in the original cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the 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 companies 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 entered into this service and bottom line my firm Kevin has stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have actually worked with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
employer whose service is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Availability.
1. The credit is available to all employers regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying wages varies by whether a company had, on average, basically than.
100 staff members in 2019.
Business that focus on ERC filing support typically supply proficiency and support to assist services navigate the complex procedure of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Ppp Loan
Eligibility Evaluation: These business will assess your business’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist identify.
Documents and Computation: ERC filing services will help in collecting the needed documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit quantity based on qualified incomes and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed kinds and paperwork on your behalf. This consists of finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have developed with time. These business stay updated with the latest changes and ensure that your filings abide by the most current standards. If the IRS demands extra info or carries out an audit associated to your ERC claim, they can also provide ongoing support.
It is very important to research study and veterinarian any company using ERC filing support to guarantee their credibility and know-how. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who provide ERC filing support.
Remember that while these business can supply important support, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate services to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, employers must satisfy one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts 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 percentage (approximately 70%) of certified incomes paid to staff members, including certain health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. The same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, permitting qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to amend prior-year tax returns and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, normally Form 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the company.
It’s important to note that the ERC arrangements and eligibility criteria have developed gradually. The best course of action is to talk to a tax professional or check out the official IRS site for the most detailed and updated info relating to the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a business should fulfill one of the following requirements:.
Business operations were completely 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 defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified 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 instantly preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes finishing the required forms and consisting of the credit on your work income tax return (usually Type 941). The exact time it requires to process the credit can differ based on several factors, including the intricacy of your service and the work of the IRS. It’s advised to consult with a tax professional for guidance particular to your circumstance.
There are several business that can assist with the procedure of declaring the ERC. Some popular companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It’s important to talk to a tax expert or visit the official internal revenue service website for the most up-to-date and precise information regarding eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or less employees usually in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. In other words, even if the.
workers worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers 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, “earnings” consists of not simply cash payments however also a portion of the cost of employer.
offered healthcare. Employee Retention Credit 2021 Ppp Loan
Payment.
Employers can be instantly compensated for the credit by lowering the quantity of payroll taxes they.