Lets talk first about Employee Retention Credit Notice 2021-20 :
Our team here what do these men doing everybody in this space is assisting teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals really discover the program we ought to head to the room 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 hundreds of millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I suggest you understand if you just begin to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply 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 validated 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 know when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the process has actually been finished and the number of you believe you’ve processed since you began this we’re about 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 most of you have actually never ever become aware of I certainly hadn’t become aware of it till very just recently and learned a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 simply contact your bank manager and say 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 become 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 simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund alright go on sorry I simply need to make sure 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 talking 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 gorgeous difficult check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s staff member retention credit that person had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have owned a service but it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 right so there were six 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 two and three of 2021. alright so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part cash how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wished 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 5 thousand Max and after that what takes place 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 worker that is because that’s a great deal of cash it is now there’s a caution here the PPP money would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big certainly now the huge question is why does no one understand about this due to the fact that look when I initially heard about this when I initially met Josh you understand I’ve got lots of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I do not think it since I use 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 been worthy of and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my politician buddies Governor Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody know about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin because in the PPP loan process the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our nation 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 mayhem since keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you might not do 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 federal government never made it clear to anybody about how to.
do this does your CFO know how to do this not really he or she’s never done it in the past 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 accounting professional’s never done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually stayed in business because 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property 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.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether a company had, usually, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing support normally offer expertise and support to help services browse the complex procedure of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Notice 2021-20
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare, they can help figure out.
Documentation and Estimation: ERC filing services will help in gathering the required documents, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit amount based upon eligible earnings and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can review your past payroll records and financials to determine prospective chances for retroactive credits. They can assist you change previous tax returns to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the required forms and documents on your behalf. This consists of finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have evolved in time. These business stay upgraded with the most recent modifications and make sure that your filings comply with the most present standards. They can likewise provide ongoing assistance if the internal revenue service demands additional info or performs an audit related to your ERC claim.
It is essential to research study and veterinarian any company providing ERC filing assistance to guarantee their credibility and expertise. Search for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who provide ERC filing assistance.
Bear in mind that while these business can offer important assistance, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee accurate 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 encourage services to keep and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies must meet one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As discussed previously, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant 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 immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified wages paid to workers, including specific health insurance expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. The same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, permitting qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the amount of work taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually progressed gradually. The very best strategy is to consult with a tax professional or check out the main IRS site for the most comprehensive and updated information relating to the ERC, consisting of any current legislative changes or updates.
To receive the ERC, an organization should satisfy among the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For example, government entities and companies that received a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC involves finishing the required forms and including the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can vary based on numerous aspects, consisting of the complexity of your organization and the workload of the internal revenue service. It’s suggested to seek advice from a tax expert for guidance particular to your circumstance.
There are several business that can aid with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some popular companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these companies straight to inquire about their fees and services.
Please note that the details supplied here is based upon basic understanding and might not reflect the most recent updates or changes to the ERC. It is very important to talk to a tax expert or check out the official internal revenue service site for the most accurate and updated info relating to eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on incomes paid to all employees whether they actually 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.
enabled only for wages paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not just cash payments however also a part of the cost of employer.
provided health care. Employee Retention Credit Notice 2021-20
Employers can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.