Lets talk first about Employee Retention Credit 2021 Alternative Quarter Election :
Our group here what do these men doing everyone in this space is helping teach people about ERC and uh constantly offer a stunning breakfast and have individuals really learn about the program we should head to the space where we are able to show some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I suggest you know if you just begin to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply think about how many actual customers 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 client so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure which’s when they pay so they do not pay anything till they in fact receive the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their bank account and they can really rely on Wonder trust that the process has been completed and the number of you think you have actually processed since you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you need you require 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 actually crucial today the employee retention credit which the majority of you have actually never ever heard of I definitely hadn’t become aware of it till really recently and found out a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 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 inform us all about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services 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 alright go on sorry I simply have to ensure we got that point I indicate that’s a huge difference a loan versus money money I like cash cash that’s what we’re talking about 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 beautiful tough check in the mail where you get actual money 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 money is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have actually owned an organization but it’s based on you having W-2 employees 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 qualified 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 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of 5 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 take place um they just altered the rules in.
2021 versus because the turmoil of the pandemic so they wanted 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 up to 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say 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 big certainly now the huge question is why does no one know about this since look when I initially found out about this when I first fulfilled Josh you understand I have actually got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I do not believe it since I utilize 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 which were well deserved and we utilized them wisely to survive throughout the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin because in the PPP loan process 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 huge banks in our nation and they would process procedure 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 chaos since keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 actually he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge big business customers have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
employer whose organization is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Availability.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after completion 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 is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether an employer had, on average, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing assistance typically provide proficiency and assistance to help services browse the complex procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Alternative Quarter Election
Eligibility Assessment: These companies will assess your service’s eligibility for the ERC based upon elements such as your market, revenue, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can claim, they can assist determine.
Documentation and Computation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based upon eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to recognize potential chances for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the essential forms and documentation in your place. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed gradually. These companies remain updated with the latest changes and ensure that your filings comply with the most existing standards. If the IRS requests additional information or conducts an audit related to your ERC claim, they can likewise offer ongoing support.
It is very important to research and veterinarian any business providing ERC filing assistance to guarantee their credibility and knowledge. Search for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who use ERC filing assistance.
Bear in mind that while these companies can offer important assistance, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate businesses to retain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, companies need to fulfill one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As pointed out earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices 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 portion (approximately 70%) of qualified wages paid to employees, including particular health plan expenditures. 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, services that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. Nevertheless, the same wages 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 eligible employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Type 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is necessary to note that the ERC arrangements and eligibility requirements have actually progressed in time. The best strategy is to seek advice from a tax professional or visit the main IRS site for the most up-to-date and in-depth info relating to the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a service needs to fulfill among the following criteria:.
Business operations were completely 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 exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC includes completing the necessary types and consisting of 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, consisting of the intricacy of your business and the work of the IRS. It’s recommended to speak with a tax expert for assistance particular to your circumstance.
There are a number of business that can help with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and contact these companies straight to inquire about their costs and services.
Please keep in mind that the details offered here is based on general understanding and might not show the most current updates or changes to the ERC. It is necessary to talk to a tax professional or go to the official IRS site for the most accurate and current info regarding eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on salaries paid to all staff members whether they really worked or not. In other words, even if the.
workers worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
permitted just for wages paid to employees who did not work during the calendar quarter.
In both cases, “incomes” consists of not just cash payments but likewise a portion of the cost of company.
provided health care. Employee Retention Credit 2021 Alternative Quarter Election
Payment.
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.