Lets talk first about Employee Retention Credit 2021 Filing Deadline :
Our group here what do these guys doing everybody in this room is helping teach people about ERC and uh always supply a stunning breakfast and have individuals truly learn more about the program we must head to the room where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you understand if you just begin to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I imply consider 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 confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
receive this you understand the check is opted for sure which’s when they pay so they don’t pay anything until they actually receive the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the procedure has been completed and how many you believe you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you need specialists 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 speaking about something really essential today the employee retention credit which the majority of you have actually never heard of I certainly hadn’t become aware of it until extremely recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I have actually got the expert 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 hard this isn’t like PPP we just call your bank manager and say offer me a loan it doesn’t 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 ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to discover 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 created the cares Act and the cares act used organizations 3 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 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 money payroll tax refund fine go on sorry I just need to make sure we got that point I suggest that’s a big distinction a loan versus money money I like money money that’s what we’re speaking about 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 beautiful hard check in the mail where you get actual money 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 employee retention credit that individual had to be an employee so I’m going to make the Presumption this money 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 qualified so you have 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 appropriate so there were six 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 3 of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that 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 takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a great deal of cash it is now there’s a caution here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace 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 workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big concern is why does nobody understand about this because appearance when I initially heard about this when I first satisfied Josh you understand I’ve got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous many financial investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I do not think it because I utilize 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 been worthy of and we utilized them sensibly to stay alive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even called to my political leader friends Guv Senators they didn’t learn 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 since you took the PPP likewise not true so let’s ask Josh why does no one learn about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 procedure procedure that’s all um and here there was mayhem due to the fact that remember in the initial cares act you might not do both programs so if you had actually done PPP you might not do ERC in the original program and when they changed 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 federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never done it in the past do the banks do it nope the banks do not 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 ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has been in business because 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge huge 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 property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, employer whose company is totally or partly suspended.
decline by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing support generally offer knowledge and assistance to help organizations browse the complex procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Filing Deadline
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based upon elements such as your market, earnings, and operations. If you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim, they can help figure out.
Documents and Calculation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit quantity based upon qualified wages and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can examine your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have developed with time. These business remain upgraded with the current changes and make sure that your filings abide by the most existing standards. If the Internal revenue service requests extra info or carries out an audit related to your ERC claim, they can also provide continuous support.
It is very important to research and veterinarian any company using ERC filing help to guarantee their credibility and know-how. Search for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax specialists who use ERC filing assistance.
Remember that while these business can supply important support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to keep 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 readily available to qualified employers, including for-profit services, tax-exempt organizations, and specific governmental entities. To certify, employers need to meet one of two criteria:.
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 invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the very 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 amounts to a percentage (approximately 70%) of certified earnings paid to workers, including certain health insurance expenses. 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, businesses that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they received a PPP loan. However, the exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, allowing eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, generally Type 941. The excess can be reimbursed to the company if the credit surpasses the quantity of employment taxes owed.
It is essential to note that the ERC provisions and eligibility criteria have progressed in time. The very best course of action is to speak with a tax professional or go to the main internal revenue service website for the most comprehensive and current information relating to the ERC, including any current legal modifications or updates.
To receive the ERC, an organization needs to fulfill among the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and services that got a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the required kinds and consisting of the credit on your employment tax return (normally Kind 941). The exact time it takes to process the credit can differ based on a number of factors, consisting of the complexity of your organization and the work of the internal revenue service. It’s suggested to talk to a tax expert for guidance particular to your situation.
There are numerous business that can aid with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known business that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these business straight to ask about their costs and services.
Please keep in mind that the information offered here is based on basic knowledge and might not reflect the most current updates or modifications to the ERC. It’s important to seek advice from a tax professional or visit the main internal revenue service website for the most up-to-date and accurate details relating to eligibility, declaring procedures, and readily available assistance.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on earnings paid to all workers whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments however likewise a part of the expense of company.
supplied healthcare. Employee Retention Credit 2021 Filing Deadline
Companies can be right away repaid for the credit by lowering the quantity of payroll taxes they.