Lets talk first about Who Is Eligible For Employee Retention Credit 2021 :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh constantly offer a lovely breakfast and have individuals really learn more about the program we ought to head to the room where we have the ability to display some 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 hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I indicate you understand if you simply start to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I imply consider how many real customers 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 confirmed 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 know when you
get this you know the check is gone for sure which’s when they pay so they do not pay anything till they really get the money they don’t 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 really rely on Wonder trust that the process has been ended up and how many you think you have actually processed because you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know 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 among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re speaking about something really important today the staff member retention credit which most of you have actually never become aware of I certainly had not heard of it up until really recently and found out a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 state provide 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’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big 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 money payroll tax refund alright go on sorry I simply need to ensure we got that point I imply that’s a huge distinction a loan versus cash cash I like cash 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 original cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have actually owned a service but 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part cash how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the turmoil 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 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members 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 concern is why does no one know about this because appearance when I first heard about this when I initially satisfied Josh you understand I have actually got great deals of investments in lots of business I’m a significant supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe it because I utilize 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 which were well been worthy of and we utilized them wisely to stay alive during the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my politician good friends 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 bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it really clear that if you desired 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 simply procedure procedure that’s all um and here there was turmoil due to the fact that 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 changed 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 government never ever made it clear to anybody 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 companies yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has stayed in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge corporate clients have actually dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, employer whose business is completely or partly suspended.
decrease by more than 50%.
Availability.
1. The credit is readily available to all companies despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’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 similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar 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 qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing help generally supply competence and support to assist services navigate the complicated process of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Who Is Eligible For Employee Retention Credit 2021
Eligibility Assessment: These companies will assess your business’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can claim, they can help identify.
Documentation and Estimation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based on eligible earnings and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and submit the essential types and documents on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually progressed with time. These companies stay upgraded with the latest changes and guarantee that your filings abide by the most existing guidelines. If the Internal revenue service demands additional details or performs an audit related to your ERC claim, they can likewise supply ongoing assistance.
It is essential to research and veterinarian any company providing ERC filing help to ensure their credibility and expertise. Search for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax specialists who use ERC filing assistance.
Keep in mind that while these companies can supply valuable support, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage services to keep and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, employers need to meet one of two criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices 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 amount is equal to a percentage (as much as 70%) of certified incomes paid to employees, including specific health plan expenditures. The optimum 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 Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. However, the same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, enabling eligible employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to amend prior-year tax returns and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, usually Kind 941. The excess can be refunded to the employer if the credit surpasses the quantity of work taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have actually progressed gradually. The very best course of action is to consult with a tax professional or visit the main IRS website for the most up-to-date and in-depth details relating to the ERC, including any current legislative changes or updates.
To get approved for the ERC, a company must fulfill among the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decline is specified as a 20% decrease 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 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 example, federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the needed types and consisting of the credit on your employment income tax return (normally Kind 941). The exact time it requires to process the credit can vary based on numerous elements, including the complexity of your service and the workload of the IRS. It’s recommended to seek advice from a tax professional for guidance specific to your situation.
There are numerous companies that can assist with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some widely known companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these business straight to ask about their fees and services.
Please keep in mind that the information provided here is based upon basic understanding and may not reflect the most current updates or changes to the ERC. It is essential to consult with a tax professional or go to the official internal revenue service website for the most accurate and current details relating to eligibility, claiming treatments, and offered support.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on incomes paid to all employees whether they really worked or not. Simply put, 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 company had more than 100 workers on average in 2019.
enabled just for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply money payments however likewise a part of the cost of company.
supplied healthcare. Who Is Eligible For Employee Retention Credit 2021
Payment.
Companies can be immediately repaid for the credit by reducing the quantity of payroll taxes they.