Lets talk first about Employee Retention Credit 2021 Taxable Income :
Our group here what do these guys doing everybody in this space is assisting teach people about ERC and uh always offer a stunning breakfast and have individuals really learn more about the program we should head to the space 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 hundreds of countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I mean you understand if you simply start to 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 indicate it’s simply I suggest think of the number of 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 consumer so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they don’t pay anything up until they in fact get the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their bank account and they can really rely on Wonder trust that the procedure has actually been completed and how many 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 plainly they know what they’re doing and that’s what you need you need experts 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 Fantastic here you’re at my YouTube channel we’re discussing something truly crucial today the worker retention credit which the majority of you have actually never ever become aware of I certainly hadn’t become aware of it until extremely recently and discovered a lot about it since this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I have actually got the expert 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 difficult this isn’t like PPP we just phone your bank manager and say offer 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 love this program it’s going away soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I simply need to ensure we got that point I imply that’s a huge difference a loan versus money cash I like cash money that’s what we’re talking about 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 original cares Act is the ERC and yes Kevin it is a lovely tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Assumption this money 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 a service but it’s based on you having W-2 staff members in America not 10.99. so 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 very first six months of 2021 on the W-2 appropriate 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 three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part money how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wished 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 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York 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 IRS so it’s big clearly now the huge concern is why does nobody know about this because appearance when I initially heard about this when I initially satisfied Josh you know I have actually got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many many investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t think 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 which were well should have and we utilized them carefully to stay alive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader 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 info out there then a lot of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody know about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you desired 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 process procedure that’s all um and here there was turmoil because 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 not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it in the past 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 accountant no your accounting professional’s never ever done this before unless you have an account that entered into this service and bottom line my firm Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee 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 incomes paid by an.
company whose service is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Availability.
1. The credit is offered to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. Once the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help usually offer proficiency and support to help companies browse the intricate process of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Taxable Income
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based on factors such as your market, revenue, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can claim, they can help determine.
Documentation and Computation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit quantity based on qualified salaries and other certifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the necessary kinds and documentation in your place. This includes finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually developed over time. These companies stay updated with the current changes and ensure that your filings adhere to the most existing guidelines. They can likewise provide continuous assistance if the internal revenue service requests additional details or conducts an audit related to your ERC claim.
It is essential to research study and vet any company using ERC filing assistance to guarantee their credibility and knowledge. Look for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who offer ERC filing assistance.
Bear in mind that while these business can supply valuable help, it’s constantly a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure accurate filings.
The Employee 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 motivate organizations to retain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies should fulfill one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As mentioned previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly 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 (approximately 70%) of certified salaries paid to workers, including certain health plan costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. The exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, allowing qualified employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, usually Form 941. The excess can be reimbursed to the employer if the credit surpasses the amount of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility requirements have actually progressed in time. The very best course of action is to seek advice from a tax expert or visit the main internal revenue service website for the most updated and detailed details relating to the ERC, consisting of any current legal changes or updates.
To receive the ERC, an organization must meet one of the following criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, however there are some exceptions. For example, federal government entities and services that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC involves completing the needed kinds and including the credit on your employment income tax return (typically Form 941). The exact time it requires to process the credit can vary based on numerous elements, including the intricacy of your service and the work of the IRS. It’s recommended to seek advice from a tax expert for assistance specific to your scenario.
There are a number of business that can help with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some well-known companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these companies directly to ask about their services and costs.
Please keep in mind that the details offered here is based upon general knowledge and might not reflect the most recent updates or changes to the ERC. It is very important to seek advice from a tax expert or check out the main IRS site for the most up-to-date and precise information concerning eligibility, claiming treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on earnings paid to all workers whether they in fact worked or not. Simply put, even if the.
workers worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
permitted only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not simply cash payments however likewise a part of the expense of company.
provided healthcare. Employee Retention Credit 2021 Taxable Income
Payment.
Employers can be immediately repaid for the credit by lowering the amount of payroll taxes they.