Lets talk first about Employee Retention Credit 2020 Irs :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh always supply a lovely breakfast and have people truly learn 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 wish to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I suggest you know 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 mean it’s simply I mean think of 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 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
receive this you understand the check is chosen sure which’s when they pay so they don’t pay anything until they in fact receive the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their savings account and they can genuinely trust Wonder trust that the procedure has actually been completed and how many you think you have actually processed since 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 require you require professionals 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 discussing something actually important today the worker retention credit which most of you have actually never become aware of I definitely hadn’t become aware of it up until really just recently and discovered a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact 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 inform us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to find out 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 created the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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 cash payroll tax refund okay go on sorry I simply need to make sure we got that point I suggest that’s a big distinction a loan versus cash money I like cash money that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get actual cash from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s staff member retention credit that individual needed 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 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wished to even get more to keep those workers 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 worker that is because that’s a great deal of money it is now there’s a caution here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York 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 IRS so it’s substantial obviously now the big question is why does nobody know about this since look when I initially heard about this when I initially met Josh you understand I’ve got lots of investments in lots of business I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t believe it since 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 carefully to survive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even called to my political leader pals Governor Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a lot of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 just procedure procedure that’s all um and here there was chaos since remember in the initial cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC due to the fact that 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 know how to do this not actually he or she’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 entered into this organization and bottom line my company Kevin has been in business since 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose organization is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Schedule.
1. The credit is available to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, typically, basically than.
100 workers in 2019.
Business that specialize in ERC filing support typically offer proficiency and assistance to assist organizations navigate the complicated procedure of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2020 Irs
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can declare, they can assist figure out.
Paperwork and Estimation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based upon qualified incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize possible chances for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the needed forms and documentation on your behalf. This includes finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have progressed in time. These business stay updated with the most recent changes and ensure that your filings adhere to the most current standards. They can likewise supply continuous assistance if the internal revenue service demands extra details or conducts an audit related to your ERC claim.
It’s important to research study and vet any business using ERC filing support to ensure their credibility and knowledge. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who use ERC filing assistance.
Remember that while these business can provide important assistance, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure precise filings.
The Staff Member 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 companies to retain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers need to fulfill one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of certified salaries paid to workers, including specific health plan costs. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. The same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, usually Type 941. The excess can be refunded to the company if the credit surpasses the quantity of employment taxes owed.
It’s important to note that the ERC provisions and eligibility criteria have actually developed in time. The very best course of action is to talk to a tax expert or check out the official internal revenue service site for the most comprehensive and updated information regarding the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, an organization needs to meet among the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a substantial decline 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% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and services that got a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC includes finishing the needed forms and including the credit on your work tax return (typically Type 941). The exact time it takes to process the credit can differ based upon several elements, including the complexity of your service and the work of the internal revenue service. It’s suggested to seek advice from a tax expert for guidance specific to your scenario.
There are a number of business that can assist with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some popular business that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these companies straight to ask about their services and costs.
Please note that the details offered here is based upon basic knowledge and might not show the most current updates or modifications to the ERC. It is very important to speak with a tax expert or go to the official IRS site for the most precise and current info concerning eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on incomes paid to all staff members whether they actually worked or not. In other words, 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 workers usually in 2019, then the credit is.
allowed just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments however likewise a portion of the cost of employer.
provided health care. Employee Retention Credit 2020 Irs
Payment.
Companies can be immediately reimbursed for the credit by decreasing the quantity of payroll taxes they.