Lets talk first about Employee Retention Credit 2020 Vs 2021 :
Our team here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh always supply a lovely breakfast and have individuals really learn about the program we ought to head to the space 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 confirming that the check is on the method I indicate you understand 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 suggest it’s just I imply consider how many real clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their bank account and they can really trust Wonder trust that the process has actually been ended up and how many you believe you have actually processed because 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 experts 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 truly essential today the employee retention credit which the majority of you have never ever become aware of I definitely had not become aware of it up until really recently and discovered a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I’ve got the professional 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 hard this isn’t like PPP we simply call up your bank manager and state provide 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 ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I just have to ensure we got that point I mean that’s a big distinction a loan versus cash cash I like money cash that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get real cash from the internal revenue service all right so let’s talk about 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 needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have owned a company but it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 workers 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 walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite 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 precise Kevin is 50 of the worker’s income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus due to the fact that the turmoil 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 up to 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caution here the PPP money would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state 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 internal revenue service so it’s big obviously now the big concern is why does no one know about this because look when I initially became aware of this when I first met Josh you know I have actually got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I do not think it since I utilize the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them sensibly to stay alive throughout the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even called to my political leader buddies Governor Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody learn about the worker retention credit you understand what’s fascinating you’re discussing 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 country 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 chaos due to the fact that keep in mind in the original cares act you could not do both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed 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 anybody about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this business and bottom line my firm Kevin has been in business since 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business customers have actually worked with bottom line to recuperate other government programs we’ve 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 federal government programs.
The worker 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 earnings paid by an.
company whose business is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all companies despite size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar 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 qualifying incomes paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries differs by whether an employer had, on average, basically than.
100 workers in 2019.
Business that concentrate on ERC filing assistance generally supply proficiency and support to assist businesses browse the intricate procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2020 Vs 2021
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. If you satisfy the requirements for the credit and recognize the maximum credit amount you can declare, they can assist figure out.
Documentation and Calculation: ERC filing services will help in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit quantity based on qualified earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you change prior tax returns to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the necessary kinds and documentation on your behalf. This consists of completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually progressed in time. These business stay updated with the most recent modifications and guarantee that your filings comply with the most current guidelines. They can also provide continuous support if the internal revenue service demands extra information or conducts an audit related to your ERC claim.
It is essential to research and vet any company using ERC filing assistance to guarantee their reliability and know-how. Try to find recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax professionals who provide ERC submitting assistance.
Keep in mind that while these business can provide valuable assistance, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed 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 goal of the ERC is to motivate businesses to keep and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, companies need to fulfill one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices 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 receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of qualified incomes paid to workers, consisting of particular health insurance 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: At first, organizations that received an Income 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. Nevertheless, the very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, permitting eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for organizations to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, typically Form 941. The excess can be reimbursed to the employer if the credit exceeds the amount of work taxes owed.
It’s important to note that the ERC provisions and eligibility requirements have actually developed gradually. The very best strategy is to speak with a tax expert or go to the main IRS site for the most detailed and up-to-date info regarding the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, an organization needs to fulfill among the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes completing the necessary types and consisting of the credit on your work income tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon numerous factors, consisting of the intricacy of your service and the work of the IRS. It’s advised to consult with a tax expert for assistance particular to your circumstance.
There are several business that can aid with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some widely known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business directly to inquire about their services and fees.
Please note that the information supplied here is based upon general understanding and might not show the most current updates or modifications to the ERC. It is essential to speak with a tax professional or go to the main IRS site for the most accurate and up-to-date info relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on wages paid to all workers whether they actually worked or not. Simply put, 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 workers on average in 2019, then the credit is.
permitted just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not just money payments however likewise a part of the expense of company.
provided health care. Employee Retention Credit 2020 Vs 2021
Companies can be right away compensated for the credit by decreasing the amount of payroll taxes they.