Lets talk first about Employee Retention Credit First Quarter 2021 :
Our team here what do these men doing everyone in this room is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals truly learn about the program we ought to head to the room where we are able to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous 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 method I mean you understand if you just start to take a 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 indicate it’s simply I indicate think of how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you know when you
receive this you know the check is gone for sure which’s when they pay so they don’t pay anything until they in fact get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their savings account and they can genuinely rely on Wonder trust that the process has actually been completed and the number of you think you’ve processed since you started this we’re about 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 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 talking about something really crucial today the worker retention credit which most of you have never ever become aware of I definitely hadn’t heard of it up until really just recently and discovered a lot about it due to the fact that this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the specialist 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 not easy this isn’t like PPP we just call up your bank manager and say 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 become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I simply have to make sure we got that point I mean that’s a big distinction a loan versus cash cash I like money money that’s what we’re speaking about fine 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 gorgeous hard check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed to be a worker 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 staff members right you had to have owned a service however it’s based on you having W-2 workers 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 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. okay 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 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 exact Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus because 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 after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 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 minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash 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 staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the big concern is why does no one know about this since look when I first became aware of this when I initially satisfied Josh you know I’ve got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which numerous suffered through the pandemic when I first 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 been worthy of and we used them sensibly to survive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even called to my politician buddies Governor Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a lot of people informed 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 no one understand about the staff member retention credit you know what’s fascinating you’re talking about the banks Kevin since 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 huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was mayhem since remember in the original cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC due to the fact that 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 ever done it before 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 business and bottom line my firm Kevin has actually been in business because 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have actually worked with bottom line to recover other federal 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 federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, employer whose service is completely or partly suspended.
decrease by more than 50%.
Availability.
1. The credit is available to all companies regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is completely or partially 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 comparable quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a comparable 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 certifying salaries paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether a company had, typically, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance normally provide expertise and support to help services browse the intricate procedure of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit First Quarter 2021
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. They can help figure out if you fulfill the requirements for the credit and recognize the optimum credit amount you can claim.
Paperwork and Estimation: ERC filing services will help in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist determine the credit quantity based upon eligible incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the necessary kinds and paperwork on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have evolved in time. These business remain upgraded with the latest changes and make sure that your filings abide by the most existing guidelines. If the Internal revenue service demands extra information or carries out an audit related to your ERC claim, they can also offer continuous support.
It is essential to research study and vet any business using ERC filing help to ensure their credibility and knowledge. Try to find recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who offer ERC filing support.
Bear in mind that while these companies can provide valuable support, it’s constantly a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate businesses to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, employers need to satisfy one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As mentioned previously, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (as much as 70%) of qualified wages paid to employees, including particular health plan 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, businesses that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they got a PPP loan. The same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, enabling eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to amend 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 Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually developed gradually. The very best course of action is to consult with a tax expert or check out the main IRS website for the most in-depth and up-to-date details relating to the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a service must satisfy one of the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. 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 substantial decline is specified as a 20% decline in gross receipts compared to the 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, consisting of tax-exempt companies, but there are some exceptions. Government entities and services that received a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC includes finishing the needed forms and including the credit on your work tax return (usually Type 941). The exact time it requires to process the credit can differ based on several factors, consisting of the intricacy of your organization and the work of the IRS. It’s suggested to speak with a tax professional for assistance specific to your scenario.
There are a number of business that can help with the process of claiming the ERC. Some well-known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based on general knowledge and might not show the most recent updates or modifications to the ERC. It’s important to seek advice from a tax expert or check out the official internal revenue service website for the most up-to-date and precise details concerning eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all employees whether they actually worked or not. To put it simply, even if the.
employees worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed just for wages paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not simply cash payments however also a portion of the expense of employer.
offered health care. Employee Retention Credit First Quarter 2021
Payment.
Companies can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.