Lets talk first about How To Claim Employee Retention Credit For 2021 :
Our group here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly offer a stunning breakfast and have people truly learn about the program we need to head to the room where we are able to display 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 actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I indicate you know if you just start 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 consider how many real customers that went through the program yeah this is the very end this is the party at the end when the check is verified 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 understand when you
get this you know the check is chosen sure and that’s when they pay so they don’t pay anything till they in fact get the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has been completed and the number of you think you have actually processed because 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 require you require specialists 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually crucial today the worker retention credit which the majority of you have never heard of I definitely had not become aware of it till really recently and found out a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the expert 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 challenging this isn’t like PPP we just call up 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 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 love this program it’s disappearing soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start 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 practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund fine go on sorry I simply need to ensure we got that point I suggest that’s a huge difference a loan versus cash cash I like cash cash that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get actual money from the IRS all right so let’s speak about how it works due to the fact that 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 Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have owned a service however it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 employees 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 right so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wished 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 approximately 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create 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 great deal of money it is now there’s a caveat here the PPP cash would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial certainly now the big question is why does nobody understand about this since appearance when I initially heard about this when I first satisfied Josh you understand I’ve got great deals of investments in lots of business I’m a major advocate for entrepreneurship in America and make numerous lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t think it because I use 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 during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my political leader good friends Guv Senators they didn’t understand about it I indicate that’s how you understand that’s how false information is that there’s no information out there then a lot of individuals 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 know about the worker retention credit you know what’s intriguing 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 wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 procedure process that’s all um and here there was chaos because keep in mind in the initial cares act you might not do both programs so if you had 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 federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big big business customers have actually dealt with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work chance 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 designed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose business is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 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 incomes paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance usually supply expertise and support to help organizations browse the complex process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? How To Claim Employee Retention Credit For 2021
Eligibility Assessment: These business will assess your company’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can claim, they can help determine.
Documents and Calculation: ERC filing services will help in gathering the essential documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based on eligible wages and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the essential forms and documents on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have progressed over time. These companies remain upgraded with the current changes and make sure that your filings abide by the most current guidelines. If the IRS demands extra information or performs an audit associated to your ERC claim, they can also supply ongoing support.
It is essential to research and vet any business using ERC filing assistance to guarantee their trustworthiness and know-how. Look for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who use ERC filing assistance.
Bear in mind that while these companies can supply valuable assistance, it’s always a great idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and guarantee precise filings.
The Worker 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 services to maintain and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit companies, tax-exempt companies, and certain governmental entities. To certify, employers should satisfy one of two criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a significant decline is defined as a 20% decline 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 invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of qualified earnings paid to employees, consisting of specific health plan costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. However, the exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, allowing eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Form 941. If the credit goes beyond the amount of work taxes owed, the excess can be refunded to the employer.
It is essential to note that the ERC arrangements and eligibility requirements have developed over time. The best course of action is to seek advice from a tax expert or go to the main internal revenue service site for the most up-to-date and in-depth info relating to the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, an organization needs to fulfill among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and services that got a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC includes finishing the required kinds and consisting of the credit on your work income tax return (generally Kind 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the intricacy of your business and the workload of the IRS. It’s suggested to seek advice from a tax professional for assistance particular to your circumstance.
There are a number of business that can help with the process of claiming the ERC. Some widely known business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon general understanding and may not reflect the most current updates or changes to the ERC. It is essential to seek advice from a tax professional or go to the official internal revenue service website for the most precise and up-to-date information relating to eligibility, declaring procedures, and available support.
Less than 100. If the company had 100 or less staff members usually in 2019, then the credit is based.
on earnings paid to all workers whether they in fact worked or not. Simply put, even if the.
employees 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 workers on average in 2019, then the credit is.
permitted only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments however likewise a part of the expense of employer.
supplied health care. How To Claim Employee Retention Credit For 2021
Companies can be immediately compensated for the credit by lowering the amount of payroll taxes they.