Lets talk first about Qualified Wages Employee Retention Credit 2021 :
Our team here what do these guys doing everyone in this space is assisting teach people about ERC and uh always supply a gorgeous breakfast and have individuals really discover the program we should head to the space where we have the ability to display a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I indicate you know if you just start to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest consider how many real 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 have the ability to track it you know when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they really receive the money they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the process has been ended up and how many you think you have actually processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require you need specialists 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 talking about something actually essential today the worker retention credit which most of you have never become aware of I certainly hadn’t heard of it until really recently and discovered a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank supervisor and state offer me a loan it does not 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 like this program it’s going away very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered organizations 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 distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund okay go on sorry I simply need to make sure we got that point I indicate that’s a big difference a loan versus cash money I like money 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 initial cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get real money from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s worker 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 employees right you needed 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 staff members 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 very first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP cash 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 typically Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city 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 substantial clearly now the big concern is why does no one learn about this because appearance when I initially heard about this when I initially met Josh you understand I’ve got great deals of investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I don’t believe it because I utilize 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 and that were well should have and we used them wisely to stay alive 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 contacted us to my politician buddies Guv Senators they didn’t know about it I imply that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 procedure that’s all um and here there was mayhem since keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the initial program and when they changed 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 truly he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this prior to unless you have an account that went into this service and bottom line my firm Kevin has been in business given that 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge big business customers have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate 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 staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is completely or partly suspended.
decrease by more than 50%.
Availability.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing support normally supply competence and support to help organizations navigate the intricate procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Qualified Wages Employee Retention Credit 2021
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on aspects such as your market, revenue, and operations. They can assist figure out if you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim.
Documentation and Estimation: ERC filing services will help in gathering the essential paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help determine the credit amount based on qualified incomes and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the essential forms and documents on your behalf. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have developed over time. These business stay updated with the most recent changes and make sure that your filings adhere to the most current guidelines. If the IRS demands additional details or carries out an audit related to your ERC claim, they can likewise supply continuous support.
It is essential to research study and veterinarian any company using ERC filing help to ensure their reliability and expertise. Search 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 submitting assistance.
Bear in mind that while these companies can provide important support, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, employers must meet one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a considerable decline is specified 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 invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (up to 70%) of qualified earnings paid to employees, including specific health insurance expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. The same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for organizations to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, normally Kind 941. The excess can be refunded to the employer if the credit surpasses the amount of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually developed over time. The very best strategy is to seek advice from a tax professional or check out the official internal revenue service site for the most updated and in-depth info concerning the ERC, including any current legislative changes or updates.
To receive the ERC, a business must fulfill one of the following criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and organizations that got a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC includes completing the essential forms and consisting of the credit on your employment income tax return (typically Kind 941). The exact time it takes to process the credit can differ based on numerous elements, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to seek advice from a tax professional for guidance particular to your situation.
There are a number of business that can assist with the procedure of declaring the ERC. Some widely known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on basic knowledge and may not show the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or visit the main IRS site for the most up-to-date and accurate details regarding eligibility, declaring procedures, and available support.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. In other words, even if the.
employees worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
allowed only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not simply cash payments but also a portion of the cost of employer.
supplied healthcare. Qualified Wages Employee Retention Credit 2021
Payment.
Companies can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.