Lets talk first about Can I Claim Employee Retention Credit In 2022 :
Our team here what do these men doing everybody in this space is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals truly find out about the program we need to head to the room where we have the ability to show 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 hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I imply you know if you just start to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean think about how many real 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you understand the check is opted for sure which’s when they pay so they do not pay anything until they in fact get the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they deposit it into their savings account and they can really rely on Wonder trust that the procedure has been ended up and the number of you believe you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require you require 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 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 heard of I definitely had not become aware of it until really just recently and found out a lot about it since this is most likely the most affordable 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 founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just contact your bank manager and state give 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 enjoy this program it’s going away soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund alright go on sorry I simply need to make sure we got that point I indicate that’s a big distinction a loan versus money cash I like money 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that individual needed to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you needed to have owned a company but it’s based upon you having W-2 workers in America not 10.99. 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 first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part cash just 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 specific Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished 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 up to five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten 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 staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big clearly now the big question is why does no one learn about this since appearance when I first found out about this when I initially fulfilled Josh you understand I have actually got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make many lots of investments in entrepreneurs of which lots of 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 very easy to do we had our CEOs call the banks they got their loans which 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 but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no info out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody know about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin because in the PPP loan process the federal government made it extremely 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 procedure 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 due to the fact that keep in mind in the original cares act you might not do both programs so if you had done PPP you could not do ERC in the initial program and when they changed 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 government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my firm Kevin has been in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big huge corporate customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose service is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Schedule.
1. The credit is offered to all companies regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount 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 definition of certifying earnings differs by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that focus on ERC filing assistance generally supply know-how and assistance to assist services navigate the intricate procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Can I Claim Employee Retention Credit In 2022
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based upon elements such as your market, revenue, and operations. They can assist determine if you fulfill the requirements for the credit and identify the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit quantity based on qualified wages and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize potential chances for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the necessary kinds and documents in your place. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have developed with time. These companies stay updated with the latest modifications and make sure that your filings abide by the most existing standards. They can also offer continuous assistance if the internal revenue service demands extra details or carries out an audit related to your ERC claim.
It is very important to research and vet any company using ERC filing help to guarantee their credibility and expertise. Look for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who provide ERC filing assistance.
Keep in mind that while these companies can supply important help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate organizations to keep and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies must satisfy one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned previously, for 2021, a substantial decline is specified 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% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of qualified incomes paid to employees, consisting of particular health insurance costs. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. However, the same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually progressed with time. The very best strategy is to talk to a tax professional or check out the official internal revenue service website for the most detailed and current details concerning the ERC, including any recent legal modifications or updates.
To receive the ERC, a business should satisfy among the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and companies that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC includes finishing the necessary types and consisting of the credit on your employment tax return (usually Type 941). The exact time it requires to process the credit can vary based on numerous factors, including the complexity of your service and the workload of the IRS. It’s advised to consult with a tax expert for assistance specific to your scenario.
There are numerous business that can assist with the process of claiming the ERC. Some popular companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based upon general knowledge and might not reflect the most current updates or modifications to the ERC. It is necessary to seek advice from a tax professional or go to the main internal revenue service website for the most precise and updated details relating to 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 earnings paid to all workers whether they really worked or not. To put it simply, even if the.
staff members worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
allowed just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a part of the expense of employer.
offered health care. Can I Claim Employee Retention Credit In 2022
Payment.
Employers can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.