Lets talk first about Who Is Eligible For The Employee Retention Credit 2021 :
Our team here what do these men doing everyone in this space is assisting teach individuals about ERC and uh constantly supply a lovely breakfast and have individuals really learn about the program we ought to head to the space where we are able to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming 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 imply 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 verified the numbers are verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they actually receive the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their savings account and they can genuinely rely on Wonder trust that the process has been ended up and how many you think you have actually processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you require 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 Fantastic here you’re at my YouTube channel we’re talking about something truly essential today the worker retention credit which most of you have never ever become aware of I certainly had not heard of it up until extremely just recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers between 5 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 call up your bank supervisor and say give me a loan it does not 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’ve become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund all right go on sorry I simply need to make sure we got that point I indicate that’s a big difference a loan versus cash cash I like money money that’s what we’re speaking about all right 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 difficult check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual had to be a worker so I’m going to make the Assumption this money 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 an organization however it’s based on you having W-2 workers in America not 10.99. 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 have to be on payroll for the first six months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 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 during that period now let’s talk my preferred part cash how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the chaos 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 approximately five thousand Max and then what happens 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 employee that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be decreased from the twenty 6 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 a person so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge obviously now the huge concern is why does no one understand about this since appearance when I initially heard about this when I first satisfied Josh you know I’ve got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I do not believe it because I use 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 and that were well should have and we utilized them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even called to my political leader good friends Guv Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no details out there then a bunch of people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s intriguing you’re talking about the banks Kevin due to the fact that 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 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 process that’s all um and here there was mayhem since remember in the original cares act you might not do both programs so if you had actually done PPP you might 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 ever made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business because 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate clients have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose business is completely or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by federal 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. As soon as the.
employer’s gross invoices exceed 80% of a similar 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 is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes varies by whether an employer had, typically, basically than.
100 workers in 2019.
Business that specialize in ERC filing support typically supply competence and assistance to assist services navigate the complex process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Who Is Eligible For The Employee Retention Credit 2021
Eligibility Assessment: These companies will assess your service’s eligibility for the ERC based upon elements such as your market, earnings, and operations. If you fulfill the requirements for the credit and recognize the optimum credit amount you can declare, they can help determine.
Documentation and Estimation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit quantity based upon qualified wages and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize possible chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the needed types and paperwork in your place. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed in time. These business remain updated with the current modifications and make sure that your filings comply with the most current guidelines. If the IRS demands extra details or carries out an audit related to your ERC claim, they can also supply continuous support.
It is necessary to research study and veterinarian any business providing ERC filing assistance to guarantee their trustworthiness and knowledge. Look for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who use ERC submitting assistance.
Keep in mind that while these companies can provide important help, it’s constantly a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate services to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, employers need to satisfy one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As mentioned earlier, for 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified wages paid to staff members, consisting of certain 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. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they got a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides an opportunity for organizations to change prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Form 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed over time. The best course of action is to speak with a tax expert or check out the official internal revenue service site for the most comprehensive and updated details relating to the ERC, including any current legal changes or updates.
To receive the ERC, a service should meet among the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. 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 defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and businesses that got a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC includes finishing the required kinds and including the credit on your work tax return (usually Type 941). The exact time it takes to process the credit can vary based upon several factors, consisting of the intricacy of your service and the workload of the internal revenue service. It’s advised to talk to a tax expert for guidance specific to your circumstance.
There are a number of companies that can help with the procedure of declaring the ERC. Some well-known companies that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on basic understanding and may not reflect the most current updates or modifications to the ERC. It is essential to seek advice from a tax expert or check out the main IRS site for the most updated and accurate information concerning eligibility, claiming procedures, and offered assistance.
Less than 100. If the company had 100 or less staff members on average in 2019, then the credit is based.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
enabled just for wages paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments but also a part of the expense of employer.
supplied health care. Who Is Eligible For The Employee Retention Credit 2021
Employers can be immediately compensated for the credit by minimizing the amount of payroll taxes they.