Lets talk first about Employee Retention Credit Extended Through December 31 2021 :
Our group here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh always provide a lovely breakfast and have people actually learn about the program we need to head to the room where we have the ability to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I indicate you know if you just begin to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest consider how many actual 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 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
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they actually get the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their savings account and they can really trust Wonder trust that the process has actually been completed and how many you believe you’ve processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’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 Fantastic here you’re at my YouTube channel we’re discussing something actually crucial today the employee retention credit which most of you have actually never become aware of I definitely hadn’t become aware of it until very recently and found out a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder 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 your bank supervisor and say 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 representative for this I like this program it’s going away soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed 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 nearly everybody it makes a big distinction 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 okay go on sorry I simply have to make certain we got that point I imply that’s a huge distinction a loan versus money cash I like cash money 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 original cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real money from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s staff member retention credit that individual had 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 staff members right you needed to have actually owned a business however it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the 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 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part money 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 exact Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that take place um they simply 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 approximately 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create 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 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 two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars an individual 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 huge certainly now the big concern is why does no one understand about this because look when I first found out about this when I initially met Josh you know I have actually got great deals of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we utilized them sensibly to stay alive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader friends Guv Senators they didn’t know about it I imply that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one learn about the worker retention credit you know what’s interesting you’re discussing the banks Kevin because in the PPP loan procedure 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 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 mayhem since keep in mind in the original cares act you might 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 changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never ever 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 done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has been in business considering that 2009 and we have actually been dealing 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 worked with bottom line to recover 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 government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing assistance generally supply know-how and support to help businesses browse the complex process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Extended Through December 31 2021
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. They can help determine if you satisfy the requirements for the credit and determine the maximum credit amount you can claim.
Documents and Estimation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit quantity based upon qualified wages and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the essential types and paperwork on your behalf. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved gradually. These business remain upgraded with the latest changes and ensure that your filings abide by the most existing guidelines. If the Internal revenue service demands additional info or conducts an audit related to your ERC claim, they can also provide continuous support.
It is very important to research and vet any business using ERC filing assistance to ensure their reliability and competence. Try to find recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC filing support.
Remember that while these companies can supply valuable support, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage businesses to retain 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 qualified companies, including for-profit businesses, tax-exempt companies, and particular governmental entities. To qualify, companies must satisfy one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As mentioned previously, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease 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 amount is equal to a percentage (up to 70%) of qualified earnings paid to employees, including particular health plan costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received an Income Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. Nevertheless, the very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, permitting eligible companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for organizations to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare 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 quantity of employment taxes owed.
It’s important to note that the ERC provisions and eligibility requirements have actually progressed with time. The very best strategy is to consult with a tax expert or visit the official IRS website for the most current and comprehensive info regarding the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a company should fulfill among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and services that received a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC involves finishing the essential forms and consisting of the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can vary based on several elements, including the complexity of your business and the workload of the IRS. It’s recommended to seek advice from a tax expert for guidance particular to your situation.
There are several companies that can assist with the procedure of claiming the ERC. Some widely known companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based on general understanding and may not show the most recent updates or changes to the ERC. It is very important to seek advice from a tax expert or check out the main internal revenue service website for the most current and precise info regarding eligibility, declaring treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on incomes paid to all staff members whether they actually 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. The credit is if the company had more than 100 staff members on average in 2019.
allowed only for wages paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not simply cash payments but also a portion of the cost of employer.
provided healthcare. Employee Retention Credit Extended Through December 31 2021
Employers can be instantly compensated for the credit by lowering the quantity of payroll taxes they.