Lets talk first about How Do I Claim Employee Retention Credit For 2021 :
Our group here what do these people doing everyone in this room is assisting teach people about ERC and uh constantly provide a lovely breakfast and have people really learn about the program we must 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 numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I suggest you know if you simply start to 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 imply it’s simply I suggest think of 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 verified 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
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything until they actually get the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they deposit it into their checking account and they can really trust Wonder trust that the process has been finished and the number of you believe you’ve processed because you started this we’re about 35 000 of these for
about six billion dollars wow so clearly 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 Wonderful here you’re at my YouTube channel we’re speaking about something actually essential today the employee retention credit which most of you have never become aware of I definitely hadn’t heard of it up until really recently and learned a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees 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 not easy this isn’t like PPP we just phone your bank supervisor and state give me a loan it does not 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’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash 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 initial cares Act is the ERC and yes Kevin it is a gorgeous 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 person had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned a company but it’s based upon you having W-2 staff members 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 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 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 two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that duration 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 calculation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the mayhem 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 then what occurs 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 worker that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically 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 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 huge clearly now the huge concern is why does nobody understand about this due to the fact that appearance when I initially heard about this when I first satisfied Josh you understand I’ve got great deals of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not think it because I use the PPP we went through the money 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 been worthy of and we used them sensibly to stay alive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my politician good friends Governor Senators they didn’t understand about it I mean 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 since you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you understand what’s interesting you’re discussing the banks Kevin since 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 huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was turmoil because remember in the initial cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC because 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 understand how to do this not actually he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’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 given that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
employer whose business is fully or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is completely or partially suspended by 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. When the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing assistance generally provide expertise and assistance to assist businesses navigate the complex procedure of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? How Do I Claim Employee Retention Credit For 2021
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based upon elements such as your industry, profits, and operations. They can assist figure out if you satisfy the requirements for the credit and identify the maximum credit quantity you can declare.
Documentation and Computation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit quantity based upon qualified wages and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine prospective chances for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the necessary forms and documents on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have evolved over time. These companies remain upgraded with the current changes and make sure that your filings comply with the most current guidelines. They can likewise provide ongoing support if the IRS requests additional info or conducts an audit related to your ERC claim.
It is essential to research study and vet any company providing ERC filing support to ensure their trustworthiness and proficiency. Search for recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax experts who offer ERC submitting assistance.
Remember that while these business can provide valuable assistance, it’s constantly a good concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee 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 objective of the ERC is to motivate organizations to retain and pay their staff members during the pandemic, even if their operations have actually 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 certain governmental entities. To certify, employers need to satisfy one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline 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 (up to 70%) of qualified incomes paid to employees, consisting of particular 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: At first, businesses that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. However, the same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, enabling eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for services to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Type 941. The excess can be reimbursed to the company if the credit surpasses the amount of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually progressed with time. The best course of action is to speak with a tax professional or visit the main internal revenue service website for the most updated and comprehensive info regarding the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a business should fulfill one of the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the required forms and consisting of the credit on your work tax return (typically Kind 941). The exact time it takes to process the credit can differ based upon a number of elements, consisting of the complexity of your service and the work of the internal revenue service. It’s advised to consult with a tax expert for guidance particular to your circumstance.
There are a number of companies that can assist with the procedure of declaring the ERC. Some popular business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon basic understanding and may not show the most recent updates or modifications to the ERC. It is necessary to talk to a tax professional or go to the official internal revenue service website for the most accurate and current details relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all workers whether they actually worked or not. To put it simply, even if the.
workers 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.
permitted only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not simply money payments however also a part of the cost of employer.
provided healthcare. How Do I Claim Employee Retention Credit For 2021
Companies can be instantly compensated for the credit by lowering the quantity of payroll taxes they.