Lets talk first about Employee Retention Credit Q1 2021 :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always supply a stunning breakfast and have people truly learn about the program we need to head to the space where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I imply you know if you just start to 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 indicate it’s simply I imply consider how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
get this you know the check is chosen sure which’s when they pay so they don’t pay anything until they really get the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the procedure has actually been ended up and how many you believe you have actually processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require you require 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 discussing something truly important today the employee retention credit which most of you have actually never become aware of I certainly hadn’t become aware of it up until extremely just recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 manager and state offer me a loan it doesn’t 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 have actually become yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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.
fix the cash money payroll tax refund fine go on sorry I just have to make certain we got that point I mean that’s a huge distinction a loan versus money money I like cash cash that’s what we’re talking about 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 stunning difficult check in the mail where you get real money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee retention credit that person had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have actually owned an organization but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 staff members 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 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and 3 of 2021. fine 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 money just how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the chaos 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 five thousand Max and after that what happens 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 employee that is since 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 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce 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 dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the big concern is why does no one learn about this because look when I initially became aware of this when I initially satisfied Josh you understand I have actually got lots of investments in lots of companies I’m a major advocate for entrepreneurship in America and make many lots of investments in business owners of which lots of suffered through the pandemic when I first became aware of 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 extremely easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we used them wisely to survive during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody know about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure 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 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 procedure that’s all um and here there was turmoil since remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC due to the fact that 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 truly she or he’s never done it in the past 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 business your accountant no your accounting professional’s never done this before unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business customers have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is fully or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable 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 qualifying incomes paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes differs by whether a company had, usually, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing support normally supply competence and support to help services browse the complicated procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Q1 2021
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based upon elements such as your industry, profits, and operations. They can assist figure out if you meet the requirements for the credit and identify the optimum credit quantity you can claim.
Documents and Computation: ERC filing services will help in gathering the needed documents, such as payroll records and monetary statements, to support your claim. They will likewise assist determine the credit quantity based upon qualified earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to determine prospective chances for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the required kinds and documents in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually developed with time. These companies remain upgraded with the latest modifications and guarantee that your filings comply with the most present guidelines. If the Internal revenue service requests extra info or conducts an audit related to your ERC claim, they can likewise supply continuous support.
It is very important to research and veterinarian any company using ERC filing support to guarantee their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who use ERC filing assistance.
Bear in mind that while these business can supply important support, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate businesses to retain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit companies, tax-exempt companies, and certain governmental entities. To certify, companies should fulfill one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed earlier, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified earnings paid to employees, consisting of specific health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. Nevertheless, the very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, permitting eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for services to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, usually Type 941. The excess can be refunded to the company if the credit exceeds the amount of work taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility criteria have evolved gradually. The very best course of action is to seek advice from a tax professional or visit the main IRS website for the most in-depth and up-to-date details concerning the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, an organization must fulfill one of the following criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a significant decline is specified 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% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and businesses that received a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC includes finishing the needed types and including the credit on your employment income tax return (generally Type 941). The exact time it requires to process the credit can differ based on a number of aspects, including the complexity of your service and the work of the IRS. It’s advised to talk to a tax expert for assistance specific to your situation.
There are a number of companies that can assist with the process of claiming the ERC. Some widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon general knowledge and may not reflect the most current updates or changes to the ERC. It’s important to seek advice from a tax professional or go to the main IRS website for the most updated and accurate information concerning eligibility, claiming treatments, and offered assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on incomes paid to all staff members whether they actually worked or not. Simply put, even if the.
staff members worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
allowed just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but likewise a part of the cost of company.
supplied health care. Employee Retention Credit Q1 2021
Companies can be immediately compensated for the credit by minimizing the amount of payroll taxes they.