Lets talk first about Employee Retention Credit 4Th Quarter 2021 Reinstatement :
Our team here what do these men doing everybody in this space is helping teach people about ERC and uh constantly supply a lovely breakfast and have people really learn about the program we need to head to the space where we have the ability 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 numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I indicate you know if you just start to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I mean think about how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you
get this you know the check is chosen sure which’s when they pay so they don’t pay anything till they in fact receive the money 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 bank account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you think you have actually processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you require professionals on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re speaking about something truly essential today the employee retention credit which most of you have actually never heard of I certainly had not heard of it till really just recently and learned a lot about it due to the fact that this is most likely the lowest expense of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator 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 contact your bank manager and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform 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 like this program it’s going away very 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 developed the cares Act and the cares act offered companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money money payroll tax refund fine go on sorry I just need to ensure we got that point I indicate that’s a big difference a loan versus cash money I like cash money that’s what we’re speaking about all right 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 real cash from the IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s worker retention credit that individual had 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 had to have owned a business however it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 staff members 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 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because the chaos 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 as much as five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop 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 caution 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 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 internal revenue service so it’s huge undoubtedly now the big concern is why does no one learn about this due to the fact that look when I initially became aware of this when I first fulfilled Josh you know I have actually got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous many financial investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t think it since 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 which were well deserved and we utilized them wisely to survive during the pandemic so when I heard about this I said nah it can’t be true but 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 misinformation is that there’s no information out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin because 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 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 mayhem since remember 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 refraining from doing ERC because 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 ever done it before 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 company your accounting professional no your accountant’s never 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 recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is totally 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 comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
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 overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that focus on ERC filing help usually offer expertise and assistance to help services navigate the complex procedure of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 4Th Quarter 2021 Reinstatement
Eligibility Evaluation: These companies will evaluate your organization’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you satisfy the requirements for the credit and identify the maximum credit amount you can declare, they can assist figure out.
Paperwork and Computation: ERC filing services will help in gathering the needed documents, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based on qualified salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the needed forms and documents on your behalf. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have evolved over time. These companies stay updated with the current changes and ensure that your filings adhere to the most current guidelines. They can likewise supply continuous support if the internal revenue service requests extra info or conducts an audit related to your ERC claim.
It is necessary to research study and vet any company offering ERC filing assistance to guarantee their reliability and expertise. Look for established companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Bear in mind that while these companies can provide important help, it’s always an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee precise filings.
The Employee 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 encourage organizations to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, companies must satisfy one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As pointed out previously, for 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the 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 amount is equal to a percentage (up to 70%) of qualified salaries paid to employees, consisting of specific health insurance costs. The maximum credit per staff member 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 Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, enabling qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for businesses to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Kind 941. The excess can be reimbursed to the employer if the credit surpasses the amount of work taxes owed.
It is necessary to note that the ERC provisions and eligibility requirements have evolved in time. The best course of action is to seek advice from a tax expert or visit the official internal revenue service site for the most in-depth and current details relating to the ERC, including any current legal modifications or updates.
To qualify for the ERC, a service should satisfy one of the following 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 receipts. For 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease 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 immediately preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The process for declaring the ERC involves completing the required kinds and including the credit on your employment tax return (typically Kind 941). The exact time it requires to process the credit can differ based on several factors, consisting of the complexity of your business and the work of the internal revenue service. It’s recommended to talk to a tax expert for assistance specific to your circumstance.
There are numerous business that can assist with the procedure of claiming the ERC. Some widely known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based on general understanding and may not show the most current updates or changes to the ERC. It is necessary to speak with a tax expert or visit the main internal revenue service website for the most precise and updated information concerning eligibility, declaring treatments, and available support.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on incomes paid to all employees whether they actually worked or not. Simply put, even if the.
employees worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments however also a portion of the expense of company.
provided health care. Employee Retention Credit 4Th Quarter 2021 Reinstatement
Companies can be immediately repaid for the credit by decreasing the amount of payroll taxes they.