Lets talk first about Employee Retention Credit Extended To December 31 2021 :
Our team here what do these guys doing everybody in this room is helping teach people about ERC and uh always supply a gorgeous breakfast and have individuals truly discover the program we should head to the space where we have the ability 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 numerous countless dollars literally 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 look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I suggest think of 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 consumer so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they do not pay anything up until they actually get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their checking account and they can really trust Wonder trust that the procedure has been finished and the number of you believe 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 require you require 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 Terrific here you’re at my YouTube channel we’re speaking about something truly crucial today the staff member retention credit which most of you have never heard of I certainly had not become aware of it until extremely 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 business anywhere
anytime if you have staff members in between 5 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 largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call up your bank manager and state give me a loan it does not 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 soon you got to find out all about it let’s talk staff member 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 provided organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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.
correct the money cash payroll tax refund fine go on sorry I simply have to make certain we got that point I mean that’s a huge distinction 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 lovely hard check in the mail where you get actual 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 employee retention credit that person had to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have owned an organization but it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 staff members 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 very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two 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 have to be on the W-2 during that duration now let’s talk my favorite part money just how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the turmoil of the pandemic so they wanted 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 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of money it is now there’s a caution here the PPP cash would have to be reduced 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 usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual 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 IRS so it’s substantial clearly now the big question is why does no one learn about this due to the fact that look when I initially found out about this when I first fulfilled Josh you understand I’ve got great deals of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many lots of investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t believe it because I utilize the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them carefully to survive throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even called to my political leader good friends Governor Senators they didn’t know about it I suggest that’s how you know that’s how false information is that there’s no info out there then a lot of people told 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 nobody know about the staff member retention credit you know what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation 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 initial cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed 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 ever made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it in the past 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 business your accountant no your accountant’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 been in business because 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 lot of our big big business clients have worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work chance 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 created to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose company is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all companies regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether a company had, usually, basically than.
100 workers in 2019.
Business that concentrate on ERC filing help usually provide knowledge and support to assist organizations browse the complex process of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Extended To December 31 2021
Eligibility Evaluation: These companies will evaluate 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 optimum credit amount you can claim, they can help identify.
Documentation and Calculation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit amount based upon eligible salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the required forms and paperwork in your place. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These business stay updated with the latest modifications and make sure that your filings abide by the most existing guidelines. They can also supply ongoing assistance if the IRS requests extra details or conducts an audit related to your ERC claim.
It is essential to research study and vet any company providing ERC filing help to guarantee their trustworthiness and know-how. Search for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who provide ERC submitting support.
Keep in mind that while these business can provide valuable help, it’s always a good concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified 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 procedures. The goal of the ERC is to motivate services to keep and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, companies should meet one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As discussed previously, for 2021, a considerable 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% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of certified salaries paid to workers, including specific health plan expenses. The optimum 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 received an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. However, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting qualified companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It is essential to note that the ERC provisions and eligibility requirements have actually progressed with time. The best course of action is to seek advice from a tax professional or visit the official IRS website for the most detailed and updated info concerning the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a company should fulfill among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a considerable decrease is defined 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% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and businesses that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC involves finishing the needed types and including the credit on your work income tax return (typically Kind 941). The exact time it takes to process the credit can differ based on a number of factors, consisting of the intricacy of your business and the work of the IRS. It’s recommended to speak with a tax expert for guidance particular to your scenario.
There are numerous companies that can help with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some well-known companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these business straight to ask about their costs and services.
Please keep in mind that the details provided here is based on basic knowledge and might not reflect the most recent updates or changes to the ERC. It is essential to speak with a tax expert or visit the main internal revenue service site for the most updated and precise information concerning eligibility, declaring treatments, and offered support.
Less than 100. If the employer had 100 or fewer workers typically in 2019, then the credit is based.
on earnings paid to all staff members whether they really worked or not. In other words, even if the.
employees worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “incomes” consists of not just cash payments however also a part of the expense of employer.
offered healthcare. Employee Retention Credit Extended To December 31 2021
Employers can be right away repaid for the credit by lowering the quantity of payroll taxes they.