Lets talk first about Employee Retention Credit 2021 For 1099 Employees :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always supply a lovely breakfast and have individuals actually find out about the program we need to head to the space where we are able to display some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I suggest you know if you simply start 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 just I mean consider the number of actual 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 validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you know when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they really receive the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been completed and the number of you believe you have actually processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know 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 Wonderful here you’re at my YouTube channel we’re discussing something actually crucial today the worker retention credit which the majority of you have never ever heard of I definitely hadn’t heard of it until extremely recently and discovered a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers 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 largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply phone 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 us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I like this program it’s going away soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I just need to ensure we got that point I suggest that’s a big difference a loan versus money money I like money cash that’s what we’re speaking about alright 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 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 seems like to me if it’s a if it’s worker retention credit that individual needed to be a staff member 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 employees right you needed to have actually owned a company but it’s based upon you having W-2 staff members 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 qualified 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 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright 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 cash how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the mayhem of the pandemic so they wished to even get more to keep those workers 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 then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six 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 cash it is now there’s a caveat here the PPP cash would have to be lowered 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 typically Kevin is if you took PPP money someplace around ten 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the big concern is why does nobody learn about this because appearance when I initially heard about this when I first fulfilled Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make many lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not believe it because I utilize the PPP we went through the money 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 deserved and we used them carefully to stay alive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t understand 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 due to the fact that you took the PPP also not real so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s interesting you’re discussing the banks Kevin since in the PPP loan process the federal government made it really clear that if you desired 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 process process 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 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 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 ever 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 accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this company 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 federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge business customers have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work opportunity 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 created to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, company whose service is fully or partially suspended.
decline by more than 50%.
1. The credit is available to all companies despite size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, usually, basically than.
100 employees in 2019.
Business that specialize in ERC filing support usually offer knowledge and support to assist services navigate the intricate process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2021 For 1099 Employees
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can claim, they can assist identify.
Documentation and Computation: ERC filing services will assist in collecting the needed paperwork, such as payroll records and financial statements, to support your claim. They will also help determine the credit quantity based upon eligible earnings and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the needed types and documentation on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have developed in time. These companies remain updated with the most recent modifications and ensure that your filings comply with the most present standards. If the Internal revenue service requests extra information or carries out an audit related to your ERC claim, they can also supply continuous assistance.
It’s important to research and vet any company providing ERC filing assistance to ensure their trustworthiness and expertise. Search for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who use ERC filing assistance.
Bear in mind that while these business can offer valuable help, it’s always a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure 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 measures. The goal of the ERC is to motivate organizations to retain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, companies must meet one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease 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 (up to 70%) of certified wages paid to staff members, including certain health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. However, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, allowing eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, usually Form 941. The excess can be refunded to the company if the credit exceeds the quantity of employment taxes owed.
It is necessary to note that the ERC arrangements and eligibility requirements have actually developed gradually. The best strategy is to talk to a tax expert or visit the main internal revenue service website for the most current and detailed info concerning the ERC, including any current legislative modifications or updates.
To qualify for the ERC, an organization needs to meet one of the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and businesses that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes completing the needed kinds and including the credit on your employment tax return (typically Form 941). The exact time it takes to process the credit can vary based upon a number of factors, consisting of the intricacy of your business and the workload of the IRS. It’s suggested to consult with a tax expert for assistance particular to your situation.
There are numerous companies that can aid with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some widely known business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these companies straight to inquire about their services and fees.
Please keep in mind that the information provided here is based upon general knowledge and may not show the most current updates or modifications to the ERC. It is essential to talk to a tax expert or visit the official IRS website for the most updated and precise details relating to eligibility, declaring treatments, and available help.
Less than 100. If the company had 100 or fewer staff members usually in 2019, then the credit is based.
on earnings paid to all workers whether they in fact worked or not. In other words, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
enabled only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments however also a part of the expense of employer.
offered health care. Employee Retention Credit 2021 For 1099 Employees
Companies can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.