Lets talk first about Qualifying For Employee Retention Credit 2021 :
Our team here what do these guys doing everybody in this room is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have people really discover the program we should head to the space where we have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I suggest you understand if you just start to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I mean 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 verified the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything till they really get the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their checking 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’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you require specialists 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 worker retention credit which the majority of you have never ever become aware of I certainly hadn’t become aware of it until really just recently and learned a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply phone your bank supervisor and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us 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 disappearing very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund alright go on sorry I just need to make sure we got that point I suggest that’s a big difference a loan versus money money I like cash 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 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 IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s employee retention credit that person had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned a company but it’s based upon you having W-2 staff members 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 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 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. fine 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 just how much can you return 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 employee’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished 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 takes place 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 6 thousand dollars per worker that is because that’s a great deal of money 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 two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the big question is why does nobody understand about this because look when I initially heard about this when I first fulfilled Josh you know I’ve got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not think it since I use the PPP we went through the cash 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 deserved and we used them wisely to stay alive during the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan procedure 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 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 mayhem since remember in the initial cares act you could not do both programs so if you had actually done PPP you could not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 understand how to do this not really she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose business is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. When the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance usually offer knowledge and support 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? Qualifying For Employee Retention Credit 2021
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based upon elements such as your market, revenue, and operations. If you satisfy the requirements for the credit and determine the optimum credit amount you can claim, they can help figure out.
Documentation and Computation: ERC filing services will help in gathering the required documents, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit quantity based upon qualified earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to identify prospective chances for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the necessary types and documentation on your behalf. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually developed with time. These companies stay updated with the most recent modifications and ensure that your filings adhere to the most current guidelines. If the IRS requests extra info or carries out an audit associated to your ERC claim, they can likewise offer ongoing support.
It’s important to research and vet any company providing ERC filing support to guarantee their trustworthiness and knowledge. Look for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who provide ERC filing support.
Bear in mind that while these companies can provide valuable help, it’s always an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee precise filings.
The Worker 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 organizations to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies should meet one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline 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 immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified salaries paid to workers, including certain 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 got an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. The same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, permitting eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, usually Form 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is very important to note that the ERC provisions and eligibility requirements have actually evolved over time. The best strategy is to consult with a tax expert or visit the main IRS website for the most in-depth and current info relating to the ERC, including any recent legal changes or updates.
To get approved for the ERC, a business needs to fulfill one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the 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 organizations, but there are some exceptions. Federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes completing the necessary kinds and consisting of the credit on your employment income tax return (usually Form 941). The exact time it requires to process the credit can differ based upon numerous elements, consisting of the complexity of your company and the work of the IRS. It’s suggested to seek advice from a tax expert for assistance specific to your situation.
There are numerous companies that can assist with the process of claiming the ERC. Some popular business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based upon basic knowledge and may not reflect the most current updates or changes to the ERC. It is necessary to seek advice from a tax professional or check out the official IRS site for the most up-to-date and precise info concerning eligibility, claiming procedures, and available help.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings paid to all employees whether they in fact worked or not. In other words, even if the.
employees worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
allowed only for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments however also a part of the cost of company.
supplied healthcare. Qualifying For Employee Retention Credit 2021
Companies can be right away repaid for the credit by decreasing the amount of payroll taxes they.