Lets talk first about Ppp Employee Retention Credit 2021 :
Our group here what do these men doing everybody in this room is helping teach individuals about ERC and uh always supply a lovely breakfast and have people truly discover the program we need to head to the space where we have the ability to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars actually 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 method I imply you know if you simply start to 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 mean it’s just I suggest think about 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 confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you understand the check is opted for sure which’s when they pay so they do not pay anything until they actually receive the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the procedure has actually been completed and how many you believe you’ve processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require you require 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 Terrific here you’re at my YouTube channel we’re talking about something really essential today the staff member retention credit which most of you have actually never heard of I certainly hadn’t heard of it until really just recently and found out a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I have actually got the professional 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 hard this isn’t like PPP we just phone your bank supervisor 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 become yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there two 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 alright go on sorry I just need to make sure we got that point I mean that’s a big difference a loan versus cash money I like cash 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 difficult check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that person had to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have owned a company however it’s based on you having W-2 workers 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 eligible so you have 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 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three 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 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 exact Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the mayhem 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 takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 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 state hypothetically you owned a dining establishment 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 internal revenue service so it’s substantial undoubtedly now the big concern is why does nobody understand about this because appearance when I initially became aware of this when I first met Josh you know I’ve got great deals of investments in lots of companies I’m a major supporter for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I do not believe it because I utilize the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them wisely to survive during the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a lot of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody learn about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it really 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 process 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 chaos since keep in mind in the original cares act you might not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC since 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 actually he or she’s never done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this before unless you have an account that entered into this service and bottom line my firm Kevin has stayed in business given that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying incomes varies by whether a company had, on average, basically than.
100 employees in 2019.
Companies that focus on ERC filing assistance usually supply knowledge and assistance to assist organizations browse the intricate process of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Ppp Employee Retention Credit 2021
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you satisfy the requirements for the credit and determine the optimum credit quantity you can claim, they can help identify.
Documents and Computation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based on eligible wages and other certifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can examine your past payroll records and financials to recognize potential chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the required kinds and documents in your place. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually progressed over time. These companies stay updated with the latest changes and guarantee that your filings adhere to the most existing guidelines. They can likewise provide continuous assistance if the internal revenue service requests additional details or carries out an audit related to your ERC claim.
It is necessary to research study and veterinarian any company providing ERC filing help to ensure their reliability and competence. Try to find established companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who offer ERC submitting assistance.
Remember that while these business can offer important assistance, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate services to keep and pay their workers 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 companies, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers need to fulfill one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices 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 certified incomes paid to staff members, including 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 got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they got a PPP loan. Nevertheless, the exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to modify prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, typically Type 941. The excess can be refunded to the company if the credit goes beyond the quantity of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have actually evolved gradually. The best course of action is to consult with a tax professional or visit the official internal revenue service website for the most in-depth and up-to-date info concerning the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a company must meet one of the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross invoices 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% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and organizations that got a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC includes finishing the required kinds and consisting of the credit on your work income tax return (generally Type 941). The exact time it takes to process the credit can differ based on a number of aspects, consisting of the intricacy of your company and the work of the internal revenue service. It’s advised to seek advice from a tax professional for assistance particular to your scenario.
There are numerous companies that can assist with the procedure of claiming the ERC. Some well-known companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general understanding and may not show the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or go to the official IRS website for the most current and accurate information relating to eligibility, declaring treatments, and offered help.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on incomes paid to all workers whether they really 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. The credit is if the employer had more than 100 workers on average in 2019.
permitted just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply money payments however also a part of the expense of employer.
offered healthcare. Ppp Employee Retention Credit 2021
Employers can be instantly compensated for the credit by lowering the quantity of payroll taxes they.