Lets talk first about Employee Retention Credit Q3 And Q4 2021 :
Our group here what do these people doing everyone in this space is assisting teach individuals about ERC and uh constantly offer a stunning breakfast and have individuals actually learn more about the program we ought to head to the space where we are able to show a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I indicate you know if you just begin to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I mean 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 confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
receive this you understand the check is opted for sure and that’s when they pay so they don’t pay anything until they really receive 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 savings account and they can truly trust Wonder trust that the process has been completed and how many you think you’ve processed given that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need 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 Terrific here you’re at my YouTube channel we’re talking about something truly essential today the staff member retention credit which most of you have actually never ever become aware of I definitely had not become aware of it up until really recently and learned a lot about it due to the fact that this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest 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 manager and state give me a loan it doesn’t 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 enjoy this program it’s disappearing soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply have to make sure we got that point I suggest that’s a big distinction a loan versus cash money I like money 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 beautiful hard check in the mail where you get actual money from the internal revenue service 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 staff member retention credit that person had to be an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you needed to have owned a service 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 need to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted to even get more to keep those staff members 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 develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say 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 huge obviously now the big concern is why does no one understand about this since appearance when I first became aware of this when I initially met Josh you know I’ve got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t believe 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 and that were well been worthy of and we used them carefully to survive throughout the pandemic so when I heard about this I stated 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 imply that’s how you know that’s how misinformation is that there’s no information out there then a lot of people told 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 staff member retention credit you know what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process 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 big banks in our country and they would process procedure 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 chaos due to the fact that keep in mind in the original 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 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 federal government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually 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 business your accountant no your accountant’s never ever done this before unless you have an account that went into this organization and bottom line my company Kevin has stayed in business since 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose business is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers despite size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that focus on ERC filing assistance usually provide knowledge and assistance to assist services browse the intricate process of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Q3 And Q4 2021
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can claim, they can help figure out.
Documentation and Calculation: ERC filing services will help in collecting the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based on qualified salaries and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the needed forms and documents in your place. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have progressed with time. These companies stay updated with the current changes and ensure that your filings comply with the most current guidelines. If the IRS demands extra info or performs an audit related to your ERC claim, they can likewise supply ongoing assistance.
It’s important to research and vet any business providing ERC filing help to guarantee their credibility and knowledge. Search for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who provide ERC filing support.
Bear in mind that while these business can supply valuable help, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee precise 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 goal of the ERC is to motivate organizations to retain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit companies, tax-exempt companies, and certain governmental entities. To certify, companies should meet one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As pointed out previously, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of qualified earnings paid to staff members, consisting of certain health plan expenses. The maximum 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 a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. The same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, enabling qualified employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to amend prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, usually Type 941. The excess can be refunded to the employer if the credit goes beyond the amount of work taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually progressed over time. The very best strategy is to consult with a tax expert or check out the official IRS site for the most detailed and current information regarding the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a business should fulfill among the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC includes finishing the needed kinds and including the credit on your work tax return (generally Form 941). The exact time it takes to process the credit can differ based upon numerous elements, consisting of the intricacy of your business and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your circumstance.
There are numerous business that can help with the procedure of declaring the ERC. Some well-known business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on basic knowledge and may not show the most current updates or changes to the ERC. It is very important to consult with a tax expert or visit the main IRS website for the most accurate and updated details relating to eligibility, declaring procedures, and available support.
Less than 100. If the employer had 100 or less workers on average in 2019, then the credit is based.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
allowed only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not simply money payments however also a portion of the expense of company.
supplied health care. Employee Retention Credit Q3 And Q4 2021
Employers can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.