Lets talk first about Employee Retention Credit For New Business In 2020 :
Our group here what do these people doing everyone in this space is helping teach people about ERC and uh always offer a lovely breakfast and have people truly discover the program we should head to the room where we are able to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I mean you know if you just begin to take a 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 imply 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 internal revenue service heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they actually get the money they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their checking account and they can truly rely on Wonder trust that the process has actually been finished and the number of you believe you have actually processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you need 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 Wonderful here you’re at my YouTube channel we’re talking about something actually crucial today the staff member retention credit which the majority of you have actually never become aware of I definitely had not heard of it up until extremely recently and learned a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members between 5 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 biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply contact your bank manager and say 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 become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund alright go on sorry I simply need to make sure we got that point I indicate that’s a huge difference a loan versus cash money I like money cash that’s what we’re talking 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 original cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real cash from the IRS all right so let’s speak about how it works since 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 Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have owned an organization however it’s based upon you having W-2 workers 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 have to be on payroll for the very first six 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 three and four of 2020 and you had quarters one two and 3 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 preferred part money how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum 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 salary to a maximum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the chaos of the pandemic so they wanted to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five thousand Max and then what occurs 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 six thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be minimized 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 a person so let’s say hypothetically you owned a dining establishment in New York 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 substantial clearly now the big question is why does no one understand about this since look when I initially found out about this when I initially fulfilled Josh you know I’ve got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many lots of investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I do not believe it since I utilize 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 wisely to stay alive during the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even called to my politician pals Governor Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a lot of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin since 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 big 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 just process process that’s all um and here there was mayhem because remember in the original cares act you could not do both programs so if you had done PPP you could not do 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 federal government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually 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 business 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 entered into this business and bottom line my firm Kevin has been in business considering 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 companies so a lot of our huge huge corporate clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is totally or partly suspended.
decline by more than 50%.
1. The credit is available to all companies despite size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business 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 below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of certifying earnings differs by whether a company had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing help normally provide competence and assistance to assist services browse the complex procedure of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit For New Business In 2020
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based on elements such as your industry, revenue, and operations. They can assist identify if you fulfill the requirements for the credit and recognize the maximum credit quantity you can declare.
Documents and Estimation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and financial statements, to support your claim. They will also assist determine the credit amount based upon eligible salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can evaluate your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the essential types and documents in your place. This consists of completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually progressed in time. These business stay updated with the current changes and ensure that your filings adhere to the most current guidelines. If the IRS demands additional info or performs an audit related to your ERC claim, they can likewise offer continuous assistance.
It is essential to research study and veterinarian any business offering ERC filing help to guarantee their reliability and knowledge. Search for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who use ERC submitting support.
Keep in mind that while these business can offer valuable help, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure 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 measures. The objective of the ERC is to encourage companies to keep and pay their workers during 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 businesses, tax-exempt companies, and certain governmental entities. To certify, employers should meet one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the 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 employer’s share of Social Security taxes. The credit quantity amounts to a portion (up to 70%) of qualified earnings paid to workers, consisting of particular health insurance 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: At first, organizations that received an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. The very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for businesses to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be reimbursed to the company if the credit exceeds the quantity of work taxes owed.
It is very important to note that the ERC arrangements and eligibility requirements have actually progressed in time. The best course of action is to talk to a tax professional or go to the official IRS site for the most in-depth and up-to-date details relating to the ERC, including any recent legal modifications or updates.
To receive the ERC, a company needs to fulfill one of the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and services that received a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the required types and including the credit on your work tax return (typically Form 941). The exact time it requires to process the credit can vary based on numerous factors, including the intricacy of your company and the workload of the IRS. It’s recommended to seek advice from a tax expert for assistance particular to your situation.
There are numerous business that can help with the process of claiming the ERC. Some popular business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon general knowledge and might not reflect the most current updates or changes to the ERC. It is necessary to consult with a tax professional or visit the main IRS site for the most current and accurate details regarding eligibility, claiming procedures, and available help.
Less than 100. If the company had 100 or fewer staff members usually in 2019, then the credit is based.
on salaries paid to all employees whether they actually worked or not. In other words, even if the.
staff members worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted just for wages paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments but also a part of the cost of employer.
offered healthcare. Employee Retention Credit For New Business In 2020
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.