Lets talk first about Employee Retention Credit Quarter 4 2021 :
Our group here what do these men doing everybody in this room is helping teach individuals about ERC and uh always offer a lovely 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 companies and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I suggest you understand if you just start to look at a few of these here I imply 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 the number of real 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 confirmed 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 which’s when they pay so they don’t pay anything till they actually receive the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their savings account and they can really rely on Wonder trust that the procedure has actually been completed and the number of you think you’ve processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need you need experts 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 Wonderful here you’re at my YouTube channel we’re speaking about something really essential today the worker retention credit which the majority of you have never ever heard of I definitely had not heard of it until really recently and learned a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call your bank supervisor and state offer 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 spokesperson for this I like this program it’s disappearing very soon you got to learn all 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 developed the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I simply need to make certain we got that point I suggest that’s a huge distinction a loan versus cash money I like money money that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a lovely tough check in the mail where you get actual cash from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker 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 staff members right you needed to have actually owned a company however it’s based upon you having W-2 workers 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 eligible so you have 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 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my preferred part money just how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the chaos of the pandemic so they wished 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 up to 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 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot 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 decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 internal revenue service so it’s substantial obviously now the huge concern is why does no one know about this due to the fact that appearance when I initially became aware of this when I first met Josh you know I have actually got lots of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t believe it because 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 which were well should have and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my politician good friends Guv Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s interesting you’re talking 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was turmoil due to the fact that keep in mind in the original cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never done it before 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 accountant no your accounting professional’s never done this prior to unless you have an account that went into this business and bottom line my firm Kevin has actually stayed in business because 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose service is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’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 similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, typically, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing help generally supply knowledge and assistance to assist companies navigate the complex process of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Quarter 4 2021
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based on aspects such as your industry, profits, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can declare, they can assist identify.
Paperwork and Computation: ERC filing services will help in gathering the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit quantity based upon qualified salaries and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you change prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the necessary kinds and documentation in your place. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed gradually. These companies stay updated with the latest changes and ensure that your filings comply with the most current standards. They can also supply ongoing assistance if the IRS requests additional information or carries out an audit related to your ERC claim.
It is necessary to research and veterinarian any company offering ERC filing help to ensure their trustworthiness and know-how. Search for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who offer ERC filing support.
Bear in mind that while these business can supply valuable support, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to retain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies need to fulfill one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the exact 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 quantity amounts to a percentage (up to 70%) of certified incomes paid to employees, including certain health insurance 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, businesses that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. The exact same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling eligible companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It is necessary to note that the ERC arrangements and eligibility criteria have progressed in time. The best strategy is to speak with a tax professional or check out the official internal revenue service website for the most current and comprehensive info regarding the ERC, including any recent legal changes or updates.
To get approved for the ERC, a service needs to satisfy among the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. 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 significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, however there are some exceptions. For example, government entities and companies that received a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the essential types and including the credit on your work income tax return (normally Kind 941). The exact time it takes to process the credit can vary based on a number of aspects, including the complexity of your business and the workload of the internal revenue service. It’s suggested to talk to a tax expert for guidance particular to your situation.
There are numerous companies that can help with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some well-known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these companies directly to inquire about their charges and services.
Please keep in mind that the details provided here is based upon general knowledge and might not show the most recent updates or changes to the ERC. It’s important to speak with a tax professional or visit the main IRS site for the most accurate and updated information concerning eligibility, claiming treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on earnings paid to all workers 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 staff members on average in 2019.
enabled only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments but likewise a portion of the cost of employer.
supplied health care. Employee Retention Credit Quarter 4 2021
Employers can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.