Lets talk first about Employee Retention Credit Notice 2021-49 :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always supply a stunning breakfast and have individuals really learn about the program we should head to the room where we have the ability 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 numerous countless dollars so these are duplicate 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 imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just 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 confirmed the numbers are verified 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 understand when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything till they really receive the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their checking account and they can really rely on Wonder trust that the process has been ended up and how many you believe you have actually processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the employee retention credit which the majority of you have never heard of I definitely had not become aware of it up until extremely recently and found out a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I have actually 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 supervisor and say provide me a loan it doesn’t 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’ve 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 start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund all right go on sorry I simply need to make certain we got that point I suggest that’s a huge difference a loan versus cash money I like money money that’s what we’re talking about 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 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 speak about how it works since 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 Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you had to have actually owned a company but it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 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 during that duration now let’s talk my preferred part money just how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to a maximum of seven thousand per quarter how did that take place 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 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five 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 money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically 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 employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big question is why does no one learn about this since look when I initially found out about this when I first satisfied Josh you understand I’ve got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make lots of lots of investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I don’t believe it because 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 and that were well should have and we used them wisely to survive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my politician pals Governor Senators they didn’t learn about it I mean 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 due to the fact that you took the PPP also not real so let’s ask Josh why does no one learn about the employee retention credit you understand what’s fascinating you’re discussing 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 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 due to the fact that keep in mind in the original cares act you could refrain from doing 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 not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never done it before 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 ever done this prior to unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business given that 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big big business customers have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partly 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 receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, typically, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing assistance generally supply competence and assistance to help businesses browse the complicated procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Notice 2021-49
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based on elements such as your industry, profits, and operations. They can assist identify if you meet the requirements for the credit and determine the maximum credit quantity you can declare.
Paperwork and Calculation: ERC filing services will assist in gathering the needed documentation, 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 expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to determine potential opportunities for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the needed forms and documentation in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These companies stay upgraded with the most recent modifications and ensure that your filings adhere to the most present standards. They can likewise supply continuous support if the internal revenue service demands extra info or conducts an audit related to your ERC claim.
It is very important to research and vet any business using ERC filing assistance to ensure their trustworthiness and know-how. Search for established firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax experts who offer ERC filing support.
Bear in mind that while these companies can offer important assistance, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate services to retain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies need to fulfill one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As pointed out earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease 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 right away preceding quarter.
Credit Amount: 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 staff members, consisting of specific health plan 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: At first, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. However, the very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for services to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Form 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have actually developed over time. The best course of action is to seek advice from a tax expert or go to the official internal revenue service site for the most comprehensive and updated details relating to the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a service must meet one of the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. 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 substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC includes completing the essential kinds and including the credit on your employment income tax return (generally Form 941). The exact time it requires to process the credit can differ based upon numerous aspects, including the intricacy of your business and the workload of the IRS. It’s suggested to seek advice from a tax expert for assistance particular to your scenario.
There are several business that can help with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to inquire about their services and fees.
Please keep in mind that the information supplied here is based on general understanding and might not show the most current updates or changes to the ERC. It’s important to consult with a tax professional or check out the main IRS website for the most up-to-date and accurate details regarding eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on incomes paid to all workers whether they actually worked or not. Simply put, even if the.
staff members worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
permitted only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments but likewise a part of the cost of employer.
provided healthcare. Employee Retention Credit Notice 2021-49
Employers can be instantly repaid for the credit by reducing the amount of payroll taxes they.