Lets talk first about Employee Retention Credit 2021 Ppp :
Our group here what do these people doing everybody in this room is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals truly learn more about the program we should head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I mean you know if you simply begin to take a look at some 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 suggest think of 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 verified the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure which’s when they pay so they don’t pay anything till they really receive the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their bank account and they can really rely on Wonder trust that the procedure has actually been completed and how many you believe you have actually processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something actually crucial today the employee retention credit which most of you have actually never heard of I certainly had not heard of it up until very just recently and learned 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 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 not easy this isn’t like PPP we simply contact your bank manager and say 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 disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund all right go on sorry I simply have to make certain we got that point I imply that’s a big distinction a loan versus cash money I like money cash that’s what we’re talking about okay 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 hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that person needed to be a staff member 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 workers right you had 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 employees 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 first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. all right 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 get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the turmoil 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 approximately five thousand Max and then what happens 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 employee that is since that’s a lot of cash it is now there’s a caveat 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 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big question is why does nobody understand about this due to the fact that appearance when I first found out about this when I first fulfilled Josh you understand I’ve got lots of investments in lots of business I’m a major advocate for entrepreneurship in America and make many many investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t think it due to the fact that I utilize 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 which were well should have and we used them sensibly to survive during the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no information out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin because in the PPP loan process 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 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 process process that’s all um and here there was mayhem due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never done it previously 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 company your accountant no your accountant’s never ever done this prior to unless you have an account that went into this organization and bottom line my company Kevin has stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big business customers have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member 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 wages paid by an.
employer whose business is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing help generally supply competence and support to assist organizations browse the complex procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Ppp
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. They can help identify if you meet the requirements for the credit and recognize the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will assist in gathering the needed documents, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based on qualified wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to recognize prospective chances for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the needed types and paperwork in your place. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually evolved in time. These business stay updated with the latest modifications and guarantee that your filings adhere to the most existing guidelines. If the IRS requests extra info or performs an audit related to your ERC claim, they can likewise offer ongoing assistance.
It is necessary to research and veterinarian any business using ERC filing help to guarantee their trustworthiness and know-how. Try to find established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who offer ERC submitting assistance.
Bear in mind that while these business can supply 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 make sure 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 steps. The goal of the ERC is to encourage businesses to maintain and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, employers should satisfy one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As discussed previously, for 2021, a significant 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% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of certified salaries paid to employees, including particular health plan 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, companies that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. The same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, permitting eligible companies to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Type 941. The excess can be reimbursed to the employer if the credit exceeds the amount of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually developed gradually. The best strategy is to talk to a tax professional or visit the main internal revenue service site for the most updated and detailed information concerning the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a business needs to fulfill among the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and organizations that got a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC involves finishing the necessary kinds and consisting of the credit on your employment tax return (usually Form 941). The exact time it takes to process the credit can vary based upon numerous elements, including the complexity of your business and the work of the IRS. It’s recommended to consult with a tax professional for guidance specific to your situation.
There are several companies that can assist with the process of claiming the ERC. Some widely known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on basic knowledge and might not show the most recent updates or changes to the ERC. It is very important to speak with a tax professional or go to the main internal revenue service website for the most accurate and current information regarding eligibility, declaring treatments, and readily available support.
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 really worked or not. In other words, even if the.
employees worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments however also a part of the expense of company.
supplied healthcare. Employee Retention Credit 2021 Ppp
Employers can be right away reimbursed for the credit by lowering the amount of payroll taxes they.