Lets talk first about Employee Retention Credit 3Rd Quarter 2021 :
Our group here what do these people doing everybody in this space is assisting teach people about ERC and uh always provide a beautiful breakfast and have individuals really discover the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest you know if you just begin 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 imply it’s simply I mean think of the number of actual clients 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 validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything till they actually receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their bank account and they can genuinely rely on Wonder trust that the procedure has actually been ended up and the number of you believe 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 understand what they’re doing and that’s what you require you need 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 speaking about something really important today the worker retention credit which the majority of you have never ever heard of I definitely hadn’t heard of it until extremely just recently and learned a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the professional 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 challenging this isn’t like PPP we simply call your bank supervisor and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services 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 big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I just need to make sure we got that point I mean that’s a big distinction a loan versus money 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 original cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works because it sounds 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 Presumption this cash is not for the owner not for people 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 employees in America not 10.99. so as long as you had W-2 employees 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 first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation 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 escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that happen um they simply 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 5 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 5 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 cash would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 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 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 clearly now the huge concern is why does no one learn about this due to the fact that appearance when I first heard about this when I initially satisfied Josh you know I’ve got great deals of investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t think it because I use the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my politician pals Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a lot of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that 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 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 procedure procedure that’s all um and here there was turmoil since keep in mind in the original cares act you could not do both programs so if you had done PPP you might refrain from doing 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 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 a few of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that went into this company and bottom line my firm Kevin has actually stayed in business since 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big business customers have worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose company is totally or partially suspended.
decrease by more than 50%.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar 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 the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing help generally offer knowledge and assistance to assist organizations navigate the complex process of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 3Rd Quarter 2021
Eligibility Assessment: These business will examine 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 determine.
Paperwork and Calculation: ERC filing services will assist in collecting the needed documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit amount based on qualified incomes and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your past payroll records and financials to recognize possible chances for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential forms and paperwork in your place. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually progressed in time. These companies stay updated with the current modifications and ensure that your filings adhere to the most current standards. If the Internal revenue service demands extra information or conducts an audit associated to your ERC claim, they can also offer ongoing assistance.
It is necessary to research study and veterinarian any business using ERC filing support to ensure their trustworthiness and competence. Look for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC filing assistance.
Remember that while these companies can offer important support, it’s constantly a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure 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 steps. The objective of the ERC is to encourage organizations to retain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit companies, tax-exempt companies, and specific governmental entities. To qualify, companies should meet one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed previously, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of certified salaries paid to staff members, consisting of certain health plan 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: Initially, 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 enables businesses to declare the ERC even if they received 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 actually been retroactively broadened and enhanced, enabling eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for services to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, usually Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC provisions and eligibility requirements have progressed in time. The best course of action is to talk to a tax professional or check out the official IRS site for the most in-depth and up-to-date info relating to the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a service should satisfy one of the following criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and businesses that got a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes completing the essential forms and including the credit on your work income tax return (generally Type 941). The exact time it takes to process the credit can vary based on several aspects, including the complexity of your business and the workload of the IRS. It’s recommended to seek advice from a tax professional for guidance specific to your scenario.
There are a number of companies that can assist with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and call these business straight to inquire about their services and charges.
Please keep in mind that the details provided here is based upon general knowledge and might not reflect the most current updates or modifications to the ERC. It is necessary to speak with a tax expert or check out the official IRS website for the most accurate and updated info regarding eligibility, declaring treatments, and available help.
Less than 100. If the employer had 100 or fewer employees usually in 2019, then the credit is based.
on earnings paid to all employees whether they in fact worked or not. Simply put, even if the.
employees worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply cash payments but likewise a part of the cost of employer.
provided healthcare. Employee Retention Credit 3Rd Quarter 2021
Employers can be immediately compensated for the credit by lowering the quantity of payroll taxes they.