Lets talk first about Employee Retention Credit 2021 Revenue Reduction :
Our group here what do these men doing everybody in this space is assisting teach individuals about ERC and uh always provide a beautiful breakfast and have people really discover the program we ought to head to the room where we are able to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients 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 mean 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 verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything till they in fact get the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they deposit it into their checking account and they can really rely on Wonder trust that the procedure has actually been finished and the number of you think you’ve processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need 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 crucial today the staff member retention credit which the majority of you have actually never become aware of I definitely hadn’t heard of it up until really just recently and discovered a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees 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 Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call up your bank supervisor and say 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 have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I simply need to ensure we got that point I mean that’s a huge difference a loan versus money cash I like cash money that’s what we’re discussing 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 cash 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 individual needed to be a staff member 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 employees right you had to have actually owned a service but it’s based on 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 six 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 4 of 2020 and you had quarters one two 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 cash just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because 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 as much as 5 thousand Max and then 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of cash 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 on average Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant 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 internal revenue service so it’s huge undoubtedly now the huge concern is why does nobody understand about this due to the fact that look when I initially heard about this when I first met Josh you know I’ve got lots of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of numerous investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I don’t believe 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 which were well been worthy of and we utilized them sensibly to stay alive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even contacted us to my politician pals Governor Senators they didn’t know about it I indicate that’s how you know that’s how false information is that there’s no details out there then a bunch of individuals told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin because in the PPP loan process 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 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 process procedure that’s all um and here there was turmoil due to the fact that remember in the original cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed 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 anyone about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that went into this service and bottom line my company Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have actually worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose company is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies no matter size including tax exempt organizations. There are.
only 2 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 company is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation 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 earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings differs by whether a company had, usually, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing assistance normally supply competence and support to assist services navigate the intricate procedure of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Revenue Reduction
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based upon factors such as your industry, profits, and operations. They can help identify if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Documentation and Calculation: ERC filing services will help in collecting the required documents, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit amount based upon qualified earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your previous payroll records and financials to identify potential chances for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the required forms and documents on your behalf. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually progressed gradually. These companies remain upgraded with the current modifications and ensure that your filings comply with the most current standards. They can also supply ongoing support if the internal revenue service requests additional information or performs an audit related to your ERC claim.
It is essential to research study and vet any company offering ERC filing help to ensure their reliability and proficiency. Search for recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who provide ERC submitting assistance.
Remember that while these companies can provide valuable support, it’s always a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage businesses to maintain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, companies should satisfy one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As discussed earlier, for 2021, a significant decline 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 specified 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of certified earnings paid to workers, consisting of specific 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, companies that received an Income 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 got 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 expanded and improved, enabling qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, generally Kind 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have actually evolved over time. The best strategy is to seek advice from a tax expert or check out the main IRS website for the most current and comprehensive details regarding the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a business must meet among the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease 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 right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, federal government entities and companies that got a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the essential types and including the credit on your employment tax return (normally Type 941). The exact time it requires to process the credit can vary based on numerous elements, including the complexity of your business and the workload of the IRS. It’s suggested to consult with a tax expert for guidance particular to your situation.
There are a number of companies that can help with the process of claiming the ERC. Some widely known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based on general knowledge and may not show the most recent updates or modifications to the ERC. It is essential to seek advice from a tax professional or visit the main internal revenue service site for the most current and accurate details concerning eligibility, declaring procedures, and offered help.
Less than 100. If the employer had 100 or fewer workers on average in 2019, then the credit is based.
on earnings paid to all workers whether they in fact worked or not. Simply put, even if the.
workers worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members typically in 2019, then the credit is.
allowed just for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply money payments but likewise a part of the expense of company.
supplied healthcare. Employee Retention Credit 2021 Revenue Reduction
Companies can be right away compensated for the credit by minimizing the quantity of payroll taxes they.