Lets talk first about Employee Retention Credit Under Consolidated Appropriations Act 2021 :
Our team here what do these people doing everyone in this room is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have people really discover the program we should head to the room where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I indicate you know if you just begin to take a look at some 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 just I suggest think about how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
get this you know the check is gone for sure and that’s when they pay so they do not pay anything until they actually get the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the process has actually been completed and how many you believe you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require you require 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 Wonderful here you’re at my YouTube channel we’re speaking about something really important today the staff member retention credit which the majority of you have actually never ever heard of I certainly had not heard of it till very just recently and discovered a lot about it since this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist 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 doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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.
correct the money money payroll tax refund alright go on sorry I just need to make sure we got that point I mean that’s a big difference a loan versus cash cash I like money money that’s what we’re speaking 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 beautiful tough check in the mail where you get actual cash from the IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s employee retention credit that individual had to be a worker 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 staff members right you had to have actually owned a service however 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 eligible 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 six quarters the program was open well walk us through the 6 quarters so you had quarters 2 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 need to be on the W-2 during that period now let’s talk my preferred part cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s wage to a maximum 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 take place um they simply altered the rules in.
2021 versus due to the fact that 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 five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of money it is now there’s a caution here the PPP money would need to be minimized from the twenty six 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 cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big concern is why does no one learn about this due to the fact that look when I first became aware of this when I initially fulfilled Josh you understand I have actually got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous financial 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 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 deserved and we utilized them wisely to survive during the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even called to my politician buddies Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a lot of people 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 know about the worker retention credit you know what’s fascinating you’re talking about the banks Kevin since in the PPP loan procedure 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 country and they would process procedure 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 chaos because keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since 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 truly he or she’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah some 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 went into this business and bottom line my firm Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose service is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all employers despite size consisting of tax exempt organizations. 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 company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying wages varies by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance usually offer knowledge and support to assist businesses navigate the complicated procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Under Consolidated Appropriations Act 2021
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on factors such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim, they can assist determine.
Documentation and Calculation: ERC filing services will help in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based on qualified earnings and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to recognize possible chances for retroactive credits. They can help you change prior income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the needed kinds and documents on your behalf. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed in time. These business remain upgraded with the most recent modifications and make sure that your filings abide by the most present standards. If the IRS demands extra information or performs an audit related to your ERC claim, they can likewise provide continuous support.
It is necessary to research study and veterinarian any business offering ERC filing assistance to guarantee their credibility and know-how. Search for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who use ERC submitting support.
Keep in mind that while these business can provide important help, it’s always a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure precise 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 encourage organizations to retain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies must meet one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the very 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 employer’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of certified salaries paid to employees, including particular health insurance expenses. The maximum 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 received a Paycheck Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, enabling qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Type 941. If the credit exceeds the amount of work taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have progressed with time. The very best course of action is to consult with a tax professional or visit the official internal revenue service site for the most updated and detailed information regarding the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, a business should satisfy among the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The process for declaring the ERC involves finishing the necessary forms and consisting of the credit on your work tax return (usually Type 941). The exact time it takes to process the credit can vary based upon numerous factors, including the complexity of your business and the work of the IRS. It’s recommended to consult with a tax professional for assistance particular to your situation.
There are a number of companies that can assist with the procedure of claiming the ERC. Some widely known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon basic knowledge and may not show the most recent updates or modifications to the ERC. It is essential to seek advice from a tax expert or visit the main IRS site for the most updated and precise info regarding eligibility, claiming procedures, and available support.
Less than 100. If the employer had 100 or fewer employees usually in 2019, then the credit is based.
on incomes paid to all workers 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. If the company had more than 100 workers usually in 2019, then the credit is.
allowed only for wages paid to workers who did not work during the calendar quarter.
In both cases, “incomes” consists of not just money payments but also a portion of the expense of employer.
offered health care. Employee Retention Credit Under Consolidated Appropriations Act 2021
Companies can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.