Lets talk first about How To Claim The Employee Retention Credit 2021 :
Our team here what do these guys doing everybody in this room is assisting teach people about ERC and uh always provide a gorgeous breakfast and have individuals really find out about 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 ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you simply start to look at some 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 consider how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
get this you know the check is chosen sure and that’s when they pay so they do not pay anything till they in fact receive the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their savings account and they can really rely on Wonder trust that the process has been finished and the number of you believe you have actually processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something actually crucial today the staff member retention credit which most of you have never ever become aware of I definitely had not heard of it till very just recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the specialist 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 difficult this isn’t like PPP we just contact 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 tell us all about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to discover 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 used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody 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.
fix the cash cash payroll tax refund alright go on sorry I simply have to make sure we got that point I suggest that’s a big difference a loan versus money money I like money cash that’s what we’re discussing 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 stunning difficult check in the mail where you get actual cash from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that person needed 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 shareholders it’s for employees right you needed to have owned a company 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 six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you have 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 exact Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the mayhem 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 as much as five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be reduced 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 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 big question is why does nobody learn about this due to the fact that look when I initially found out about this when I first satisfied Josh you understand I have actually got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of many financial investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I do not believe it due to the fact that I use 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 wisely to survive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my politician friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s interesting you’re discussing 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 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 process that’s all um and here there was turmoil due to the fact that remember in the original cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the initial 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 made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big big business clients have actually worked with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member 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 salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose business is fully or partly suspended.
decline by more than 50%.
1. The credit is offered to all companies despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partly 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. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing support usually provide competence and assistance to assist businesses browse the intricate process of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? How To Claim The Employee Retention Credit 2021
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based upon factors such as your market, revenue, and operations. They can assist identify if you fulfill the requirements for the credit and identify the optimum credit quantity you can claim.
Paperwork and Calculation: ERC filing services will assist in collecting the needed documents, such as payroll records and financial statements, to support your claim. They will also help compute the credit quantity based on eligible earnings and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to identify potential chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the essential forms and documents in your place. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have evolved gradually. These business remain upgraded with the most recent changes and make sure that your filings abide by the most existing standards. If the IRS demands extra details or carries out an audit associated to your ERC claim, they can likewise supply ongoing support.
It is essential to research and veterinarian any company using ERC filing assistance to guarantee their credibility and proficiency. Search for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC filing assistance.
Remember that while these companies can offer valuable assistance, it’s always an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies to keep and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies need to meet one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline 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 (approximately 70%) of qualified incomes paid to employees, 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 a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. Nevertheless, the same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, allowing qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Form 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually developed in time. The very best course of action is to consult with a tax expert or check out the official internal revenue service site for the most comprehensive and updated details regarding the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, an organization must meet one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that received a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC involves completing the required kinds and consisting of the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can vary based on a number of factors, consisting of the complexity of your business and the work of the IRS. It’s advised to talk to a tax professional for guidance specific to your circumstance.
There are several companies that can assist with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some widely known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and contact these business directly to ask about their services and costs.
Please keep in mind that the information offered here is based upon basic understanding and may not reflect the most recent updates or changes to the ERC. It is necessary to consult with a tax professional or go to the official IRS site for the most current and accurate info regarding eligibility, declaring treatments, and available support.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on wages paid to all workers whether they really worked or not. To put it simply, even if the.
workers worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments however likewise a part of the cost of employer.
provided health care. How To Claim The Employee Retention Credit 2021
Companies can be right away repaid for the credit by lowering the quantity of payroll taxes they.