Lets talk first about Employee Retention Credit 2021 Who Qualifies :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly provide a stunning breakfast and have individuals truly learn more about the program we must head to the room where we are able to display a few 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 actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I indicate you know if you simply begin to take a look at some 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 suggest consider 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 verified the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their savings account and they can genuinely trust Wonder trust that the procedure has actually been finished and the number of you believe you have actually processed since 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 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 Terrific here you’re at my YouTube channel we’re talking about something truly important today the employee retention credit which most of you have never ever become aware of I definitely hadn’t heard of it up until extremely just recently and learned a lot about it because this is probably the lowest expense of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the expert 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 challenging this isn’t like PPP we simply call your bank manager and state provide 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’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses 3 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 2 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 alright go on sorry I simply need to make certain 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 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 cash from the internal revenue service all right so let’s talk about how it works because it sounds 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 had to have owned a business however it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 workers 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 very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk 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. fine so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you return 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 employee’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the turmoil 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 as much as five thousand Max and after that what happens 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 employee that is since that’s a great deal of cash it is now there’s a caution here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average 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 where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big concern is why does no one know about this due to the fact that look when I first became aware of this when I first satisfied Josh you know I have actually got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make numerous many investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t think it because I utilize 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 used them sensibly to stay alive throughout the pandemic so when I became aware of this I stated 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 understand about it I mean that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you know what’s intriguing you’re talking about the banks Kevin because in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 process that’s all um and here there was turmoil because keep in mind in the original cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC because 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 know how to do this not truly he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this service and bottom line my firm Kevin has actually stayed in business because 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge business clients have dealt with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work chance 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 designed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, employer whose business is fully or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying wages varies by whether a company had, usually, basically than.
100 employees in 2019.
Business that specialize in ERC filing assistance generally provide know-how and support to assist services navigate the complicated process of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Who Qualifies
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based on factors such as your industry, profits, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare, they can help determine.
Documents and Computation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit quantity based on eligible incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary forms and documentation on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually developed over time. These business remain upgraded with the most recent changes and guarantee that your filings adhere to the most present guidelines. If the Internal revenue service requests extra information or conducts an audit related to your ERC claim, they can likewise supply continuous support.
It is very important to research and vet any business offering ERC filing help to ensure their credibility and competence. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who provide ERC filing assistance.
Bear in mind that while these companies can offer valuable help, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to retain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, employers must fulfill one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the 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% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of qualified earnings paid to workers, consisting of particular health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. The same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, enabling qualified employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, typically Type 941. The excess can be refunded to the employer if the credit exceeds the quantity of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have actually evolved in time. The very best strategy is to consult with a tax expert or go to the official internal revenue service site for the most comprehensive and up-to-date details concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, a company should satisfy one of the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and companies that got a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC includes finishing the necessary forms and consisting of the credit on your work income tax return (typically Form 941). The exact time it takes to process the credit can vary based on numerous elements, including the complexity of your company and the work of the internal revenue service. It’s suggested to seek advice from a tax expert for guidance particular to your circumstance.
There are several companies that can assist with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some widely known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and call these companies straight to inquire about their services and fees.
Please note that the details offered here is based upon basic understanding and may not show the most current updates or modifications to the ERC. It is very important to seek advice from a tax expert or check out the official IRS site for the most accurate and updated information concerning eligibility, declaring treatments, and readily available assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all employees 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 company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments however also a part of the cost of company.
provided health care. Employee Retention Credit 2021 Who Qualifies
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.