Lets talk first about 2020 Employee Retention Credit Deadline :
Our team here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh always supply a gorgeous breakfast and have individuals truly find out about the program we should head to the room where we have the ability to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of 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 take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply think about the number of actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated 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 have the ability to track it you know when you
receive this you understand the check is opted for sure and that’s when they pay so they don’t pay anything until they actually receive the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their checking account and they can genuinely trust Wonder trust that the procedure has been ended up and the number of you believe you have actually processed since you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly 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 Fantastic 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 heard of I certainly hadn’t heard of it up until very just recently and found out a lot about it due to the fact that this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 call your bank manager and say provide me a loan it doesn’t 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 have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there two 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 fine go on sorry I simply have to ensure we got that point I suggest that’s a huge difference a loan versus money cash I like money money that’s what we’re talking 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 gorgeous hard check in the mail where you get real 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 employee retention credit that person had to be an employee so I’m going to make the Assumption 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 owned a business however it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need 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 right so there were six quarters the program was open well stroll 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. alright 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 cash just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that 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 after that 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of money it is now there’s a caution here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around ten thousand dollars an individual 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 cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the huge question is why does no one understand about this because look when I initially became aware of this when I initially met Josh you know I have actually got great deals of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous many investments in business owners of which numerous suffered through the pandemic when I first heard about this I called BS I do not think it due to the fact that I use the PPP we went through the cash 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 been worthy of and we used them sensibly to survive during the pandemic so when I found out 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 understand about it I indicate that’s how you know 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 because you took the PPP also not true so let’s ask Josh why does no one understand about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it very 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you might not do ERC in the initial 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 really he or she’s never done it in the past 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 company your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this service and bottom line my firm Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have actually dealt 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 real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose organization is fully or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all companies regardless of 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 qualify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is totally or partially 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. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes differs by whether an employer had, usually, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing help generally provide knowledge and assistance to assist services navigate the intricate process of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? 2020 Employee Retention Credit Deadline
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based upon elements such as your market, profits, and operations. They can assist figure out if you meet the requirements for the credit and recognize the maximum credit quantity you can claim.
Paperwork and Calculation: ERC filing services will help in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based upon qualified wages and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can examine 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 Help: Companies specializing in ERC filings will prepare and submit the necessary forms and documents in your place. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually developed gradually. These business remain upgraded with the current modifications and ensure that your filings comply with the most current standards. If the IRS demands extra details or performs an audit related to your ERC claim, they can likewise supply ongoing assistance.
It is very important to research and vet any business providing ERC filing help to ensure their reliability and knowledge. Try to find established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who offer ERC filing support.
Remember that while these business can provide valuable assistance, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to keep and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, employers should meet one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease 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 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 amounts to a portion (as much as 70%) of qualified incomes paid to employees, including certain health plan expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that got an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. The exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, typically Type 941. If the credit surpasses the amount of employment taxes owed, the excess can be refunded to the company.
It is necessary to note that the ERC provisions and eligibility requirements have developed in time. The very best course of action is to talk to a tax professional or go to the official internal revenue service website for the most in-depth and updated info concerning the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a service must meet one of the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt companies, but there are some exceptions. For instance, government entities and companies that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves finishing the needed types and including the credit on your work income tax return (normally Kind 941). The exact time it requires to process the credit can differ based on several elements, including the complexity of your company and the workload of the internal revenue service. It’s recommended to consult with a tax professional for guidance specific to your scenario.
There are numerous business that can help with the procedure of declaring the ERC. Some widely known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based upon basic understanding and might not reflect the most current updates or modifications to the ERC. It’s important to talk to a tax professional or check out the official IRS site for the most precise and current info concerning eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all employees whether they really worked or not. To put it simply, even if the.
employees worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply money payments but likewise a portion of the expense of employer.
offered healthcare. 2020 Employee Retention Credit Deadline
Payment.
Companies can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.