Lets talk first about Employee Retention Credit Extension 2021 :
Our team here what do these guys doing everybody in this room is helping teach individuals about ERC and uh always supply a lovely breakfast and have individuals actually discover the program we must head to the room where we have the ability to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I indicate you understand if you simply begin 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 mean it’s simply I suggest think about how many real clients 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 validated 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 know when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything until they in fact get the money 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 savings account and they can truly rely on Wonder trust that the procedure has actually been finished and how many you think you’ve processed because you started this we have to do with 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 discussing something truly crucial today the employee retention credit which the majority of you have never heard of I definitely hadn’t heard of it till extremely just recently and discovered a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank manager and state provide me a loan it doesn’t 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 ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to find out 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 created the cares Act and the cares act offered services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund all right go on sorry I just have to make sure we got that point I imply that’s a huge difference a loan versus money money I like cash money 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 stunning tough check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have actually owned a business however it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 employees 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 need to be on payroll for the first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 during 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 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that happen um they simply changed 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 up to 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of cash 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 usually Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant 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 substantial obviously now the big concern is why does no one learn about this since look when I initially became aware of this when I initially fulfilled Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of many financial investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t think it due to the fact that I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them carefully to survive during the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my politician good friends Guv Senators they didn’t know about it I imply that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one learn about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin because 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was chaos since remember in the initial cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original 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 government never made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accountant’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has actually been in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge corporate customers have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business 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 business is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings differs by whether a company had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally provide knowledge and assistance to assist organizations browse the complicated procedure of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Extension 2021
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based on factors such as your market, profits, and operations. They can help determine if you meet the requirements for the credit and determine the optimum credit amount you can claim.
Documentation and Estimation: ERC filing services will assist in collecting the needed documents, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based on qualified wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the needed kinds and paperwork on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually progressed over time. These companies stay upgraded with the latest modifications and guarantee that your filings adhere to the most existing standards. If the IRS requests additional details or conducts an audit associated to your ERC claim, they can likewise offer ongoing support.
It is very important to research and veterinarian any company using ERC filing support to ensure their reliability and know-how. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who use ERC submitting assistance.
Remember that while these business can offer valuable support, it’s constantly a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and make sure precise 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 goal of the ERC is to motivate organizations to retain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies should fulfill one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out earlier, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline 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 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 (approximately 70%) of qualified incomes paid to staff members, consisting of specific health insurance expenditures. 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: At first, companies that received an Income Defense 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. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, allowing eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have progressed gradually. The very best strategy is to consult with a tax professional or go to the official internal revenue service site for the most comprehensive and updated info regarding the ERC, including any recent legal changes or updates.
To get approved for the ERC, a business should fulfill among the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. 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 decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and organizations that got a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC involves finishing the necessary kinds and consisting of the credit on your work tax return (generally Kind 941). The exact time it takes to process the credit can vary based upon numerous elements, including the complexity of your company and the work of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your situation.
There are a number of business that can help with the process of declaring the ERC. Some popular companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on basic knowledge and might not reflect the most current updates or modifications to the ERC. It’s important to seek advice from a tax expert or check out the official internal revenue service website for the most up-to-date and precise info relating to eligibility, claiming treatments, and available help.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on wages paid to all staff members whether they actually worked or not. In other words, even if the.
employees worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not simply money payments however likewise a part of the cost of company.
offered healthcare. Employee Retention Credit Extension 2021
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.