Lets talk first about Does The Employee Retention Credit Apply To 2022 :
Our team here what do these people doing everybody in this room is assisting teach people about ERC and uh constantly provide a lovely breakfast and have individuals truly find out about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for companies and I want 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 validating that the check is on the way I imply you understand if you just start to take a 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 imply think of the number of real customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated 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 know the check is chosen sure which’s when they pay so they don’t pay anything till they in fact receive the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank 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 since you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you need professionals 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 discussing something truly essential today the staff member retention credit which most of you have actually never ever heard of I certainly had not heard of it till very just recently and found out a lot about it since this is most likely the lowest expense of capital for any small business anywhere
anytime if you have employees in 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 Ideas 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 manager and state offer 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 have actually become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses 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 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 fine go on sorry I simply need to make sure we got that point I mean that’s a big distinction a loan versus money cash I like money cash that’s what we’re talking about okay 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 cash from the internal revenue service all right so let’s talk about how it works because it seems 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 individuals on the cap table not for investors it’s for employees right you had to have owned a company but it’s based upon you having W-2 workers 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 qualified so you need 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 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part cash how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the turmoil of the pandemic so they wished to even get more to keep those employees 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 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 six thousand dollars per employee that is since 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 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York 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 certainly now the big question is why does nobody understand about this since look when I initially heard about this when I first satisfied Josh you understand I have actually got great deals of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many numerous financial investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t believe 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 deserved and we utilized them sensibly to survive during the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my political leader 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 info out there then a bunch of individuals told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin because in the PPP loan procedure 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 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 simply procedure process that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you might not do 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 because it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know 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 accountant no your accountant’s never done this prior to unless you have an account that went into this business and bottom line my company Kevin has stayed in business since 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is completely or partially suspended.
decrease by more than 50%.
1. The credit is 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.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The definition of certifying earnings varies by whether a company had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing help normally offer competence and support to help organizations navigate the complex process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Does The Employee Retention Credit Apply To 2022
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based on aspects such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist identify.
Paperwork and Estimation: ERC filing services will assist in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based on qualified salaries and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can examine your past payroll records and financials to identify prospective opportunities for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the required types and paperwork on your behalf. This consists of completing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have progressed over time. These business stay upgraded with the latest changes and guarantee that your filings abide by the most current standards. If the Internal revenue service demands additional information or carries out an audit related to your ERC claim, they can likewise provide ongoing assistance.
It is very important to research study and vet any company using ERC filing support to ensure their reliability and know-how. Try to find established companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who use ERC filing assistance.
Keep in mind that while these business can supply valuable support, it’s constantly a great idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions 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 objective of the ERC is to encourage businesses to maintain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, employers need to meet one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out earlier, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Amount: 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 incomes paid to staff members, consisting of certain health insurance costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. However, 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, allowing eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, usually Kind 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have evolved with time. The very best course of action is to consult with a tax professional or check out the official internal revenue service website for the most comprehensive and updated details regarding the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a company should meet one of the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts 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 businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and companies that received a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes finishing the necessary kinds and consisting of the credit on your work income tax return (generally Kind 941). The exact time it takes to process the credit can differ based upon several aspects, including the complexity of your business and the work of the IRS. It’s recommended to talk to a tax professional for assistance particular to your scenario.
There are a number of companies that can help with the procedure of claiming the ERC. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based on basic knowledge and may not reflect the most recent updates or changes to the ERC. It is essential to speak with a tax professional or visit the official internal revenue service website for the most accurate and current info concerning eligibility, claiming treatments, and available help.
Less than 100. If the employer had 100 or fewer staff members usually in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. Simply put, even if the.
staff members 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 staff members on average in 2019, then the credit is.
enabled only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments however likewise a portion of the cost of employer.
provided health care. Does The Employee Retention Credit Apply To 2022
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.