Lets talk first about Employee Retention Credit 2021 Eligibility :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh always provide a stunning breakfast and have people actually learn more about the program we ought to head to the space where we have the ability to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I imply you know if you simply begin to take a look at some of these here I suggest 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 about the number of actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed 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 understand when you
receive this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they actually receive the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their checking account and they can truly trust Wonder trust that the procedure has actually been completed and how many you think you have actually processed because you started this we’re about 35 000 of these for
about six 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 Wonderful here you’re at my YouTube channel we’re speaking about something truly essential today the employee retention credit which most of you have actually never heard of I definitely hadn’t heard of it until really 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 company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 simply 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 all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge 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 okay go on sorry I simply have to make sure we got that point I suggest that’s a huge difference a loan versus money cash I like money cash that’s what we’re discussing 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 tough check in the mail where you get real cash from the IRS all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person needed to be a staff member 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 workers right you had to have actually owned a company however it’s based on you having W-2 employees in America not 10.99. 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 six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the turmoil of the pandemic so they wanted 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 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the huge concern is why does no one understand about this because look when I first found out about this when I first satisfied Josh you understand I’ve got great deals of investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I do not believe it due to the fact that I use the PPP we went through the money 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 should have and we used them wisely to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t understand about it I indicate 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 true so let’s ask Josh why does nobody learn about the worker retention credit you understand what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely 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 procedure that’s all um and here there was chaos since keep in mind in the initial cares act you might not do both programs so if you had actually 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 since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never done it previously 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 accounting professional no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually stayed in business because 2009 and we have actually 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 huge big business customers have worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment 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 created to encourage.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, company whose organization is totally or partially suspended.
decrease by more than 50%.
Availability.
1. The credit is offered to all employers despite size including tax exempt organizations. There are.
just 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 satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that focus on ERC filing support usually supply competence and support to help companies navigate the intricate process of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Eligibility
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you meet the requirements for the credit and recognize the optimum credit quantity you can claim, they can help determine.
Documentation and Calculation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit quantity based upon eligible earnings and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the necessary types and documents on your behalf. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed in time. These business remain updated with the latest changes and guarantee that your filings adhere to the most present guidelines. They can also supply ongoing support if the internal revenue service demands extra information or performs an audit related to your ERC claim.
It is essential to research study and veterinarian any business offering ERC filing assistance to guarantee their trustworthiness and expertise. Search for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who provide ERC submitting assistance.
Keep in mind that while these business can provide valuable help, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to retain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, companies must meet one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As pointed out previously, 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 defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away 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 portion (up to 70%) of certified salaries paid to workers, including certain health plan expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. The same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, enabling qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Kind 941. The excess can be reimbursed to the company if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have developed with time. The very best course of action is to seek advice from a tax expert or go to the main IRS website for the most comprehensive and current information regarding the ERC, including any recent legal changes or updates.
To receive the ERC, a company must fulfill one of the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial 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 decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC involves finishing the essential types and including the credit on your employment income tax return (usually Type 941). The exact time it requires to process the credit can vary based on several elements, consisting of the intricacy of your company and the work of the internal revenue service. It’s suggested to talk to a tax expert for guidance particular to your circumstance.
There are numerous companies that can help with the procedure of claiming the ERC. Some widely known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon basic knowledge and might not show the most current updates or changes to the ERC. It is necessary to talk to a tax expert or check out the main IRS site for the most precise and updated info relating to eligibility, claiming treatments, and available support.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on wages paid to all employees whether they in fact worked or not. In other words, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments but likewise a portion of the cost of company.
offered health care. Employee Retention Credit 2021 Eligibility
Payment.
Employers can be immediately reimbursed for the credit by decreasing the quantity of payroll taxes they.