Lets talk first about Employee Retention Credit 2021 Extension :
Our group here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh always provide a lovely breakfast and have people really learn more about the program we need to head to the room where we are able 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 numerous countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I suggest you know if you simply begin 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 indicate it’s just I imply consider how many real 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 confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
get this you know the check is opted for sure and that’s when they pay so they do not pay anything till they really get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their savings account and they can really rely on Wonder trust that the process has been ended up and the number of you believe you’ve processed since 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 one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re speaking about something really crucial today the staff member retention credit which most of you have never heard of I definitely had not heard of it till extremely just recently and discovered a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the professional 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 simply call your bank manager and say 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 representative for this I love this program it’s going away very soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin 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 nearly everyone 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.
correct the cash money payroll tax refund fine go on sorry I just need to make certain we got that point I indicate that’s a big difference a loan versus cash cash I like money cash that’s what we’re speaking about all right 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 difficult check in the mail where you get actual cash from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s employee retention credit that individual had to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have actually owned an organization however it’s based on 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 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 proper so there were six 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 2 and 3 of 2021. all right 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 money how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s income to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the turmoil of the pandemic so they wanted to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and after that 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 six thousand dollars per employee that is since that’s a lot 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 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual 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 substantial obviously now the big concern is why does no one learn about this due to the fact that appearance when I initially heard about this when I initially satisfied Josh you know I’ve got great deals of investments in lots 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 initially became aware of this I called BS I don’t believe it since I utilize 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 survive 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 called to my political leader friends Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one understand about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very 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 just process procedure that’s all um and here there was chaos 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 refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from 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 really she or he’s never ever done it previously 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 done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has stayed in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have actually worked with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose business 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 companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company 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 service is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, typically, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing support usually offer know-how and support to assist services navigate the intricate process of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Extension
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based upon factors such as your industry, profits, and operations. They can assist figure out if you fulfill the requirements for the credit and recognize the maximum credit amount you can claim.
Documentation and Estimation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will also help compute the credit quantity based upon eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can review your past payroll records and financials to identify potential chances for retroactive credits. They can assist you change prior tax returns to claim these refunds.
Filing Support: Companies focusing on ERC filings will prepare and submit the required types and paperwork in your place. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved gradually. These business remain upgraded with the current changes and guarantee that your filings abide by the most existing guidelines. They can likewise offer ongoing assistance if the IRS demands extra details or performs an audit related to your ERC claim.
It is very important to research study and vet any company offering ERC filing support to guarantee their trustworthiness and know-how. Look for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who provide ERC submitting assistance.
Bear in mind that while these business can provide important help, it’s always a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage organizations to retain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, employers 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 considerable decline in gross receipts. As discussed previously, for 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices 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 amounts to a portion (up to 70%) of qualified salaries paid to workers, including specific health insurance expenses. 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, services that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. However, the exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, enabling eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Form 941. The excess can be refunded to the company if the credit surpasses the amount of employment taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have progressed gradually. The best course of action is to speak with a tax expert or visit the official IRS website for the most in-depth and updated information relating to the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, an organization should meet one of the following criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and services that received a PPP loan might have limitations on claiming the credit.
The process for declaring the ERC includes completing the needed kinds and including the credit on your work income tax return (usually Type 941). The exact time it takes to process the credit can vary based on several factors, including the intricacy of your service and the workload of the internal revenue service. It’s recommended to seek advice from a tax professional for assistance particular to your circumstance.
There are numerous companies that can aid with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some well-known companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these companies directly to inquire about their services and charges.
Please keep in mind that the details offered here is based upon basic understanding and might not show the most recent updates or modifications to the ERC. It is necessary to seek advice from a tax expert or go to the official internal revenue service site for the most updated and accurate details concerning eligibility, claiming treatments, and offered assistance.
Less than 100. If the employer had 100 or less employees usually in 2019, then the credit is based.
on incomes paid to all employees whether they actually worked or not. Simply put, even if the.
staff members worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted only for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but also a part of the expense of employer.
offered healthcare. Employee Retention Credit 2021 Extension
Employers can be right away repaid for the credit by minimizing the amount of payroll taxes they.