Lets talk first about Is The Employee Retention Credit Available In 2021 :
Our team here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals truly learn more about the program we ought to head to the space where we have the ability 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 actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I imply you understand if you just begin 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 simply I imply think about how many real customers 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 validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything until they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their checking account and they can genuinely rely on Wonder trust that the process has actually been completed and how many you believe you have actually processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’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 Fantastic here you’re at my YouTube channel we’re speaking about something really crucial today the worker retention credit which the majority of you have actually never ever become aware of I definitely had not heard of it up until really just recently and discovered a lot about it due to the fact that this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between five 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 biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank supervisor and state provide me a loan it doesn’t 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 become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services 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 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 money payroll tax refund alright go on sorry I just need to make certain we got that point I indicate that’s a huge distinction 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 tough check in the mail where you get actual cash from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s worker 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 needed to have actually owned an organization however it’s based upon you having W-2 employees 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 qualified 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 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that duration 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 computation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that take place 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 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be lowered 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 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 staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the big question is why does no one understand about this because look when I initially became aware of this when I initially satisfied Josh you know I’ve got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I do not think it because I utilize the PPP we went through the cash 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 been worthy of and we utilized them wisely to stay alive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my political leader good friends Governor Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one understand about the employee retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it extremely 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was turmoil because keep in mind in the original cares act you might not do both programs so if you had done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’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 accounting professional’s never done this prior to unless you have an account that went into this service and bottom line my company Kevin has been in business since 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big big corporate customers have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose business is completely or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing help typically provide competence and assistance to assist organizations navigate the complex process of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Is The Employee Retention Credit Available In 2021
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based on aspects such as your market, earnings, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can declare, they can help figure out.
Paperwork and Estimation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based upon qualified salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can review your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the required kinds and paperwork in your place. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually progressed with time. These business stay updated with the current modifications and guarantee that your filings abide by the most present guidelines. If the IRS requests additional info or carries out an audit related to your ERC claim, they can also provide continuous support.
It’s important to research study and vet any business using ERC filing support to ensure their credibility and knowledge. Search for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who provide ERC submitting assistance.
Bear in mind that while these business can offer important assistance, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to maintain 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 employers, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To certify, employers must fulfill one of two criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline 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 is equal to a portion (up to 70%) of certified incomes paid to employees, including particular health insurance 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: Initially, businesses that received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they got a PPP loan. The very same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, enabling qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to note that the ERC provisions and eligibility requirements have progressed gradually. The best strategy is to talk to a tax professional or check out the official IRS website for the most detailed and updated information concerning the ERC, including any recent legislative changes or updates.
To receive the ERC, an organization needs to meet among the following requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and companies that received a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC includes completing the essential forms and consisting of the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can vary based on numerous elements, consisting of the intricacy of your service and the workload of the internal revenue service. It’s recommended to consult with a tax expert for assistance specific to your scenario.
There are a number of companies that can help with the process of declaring the ERC. Some popular business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based on general understanding and might not show the most recent updates or modifications to the ERC. It is necessary to speak with a tax expert or visit the official IRS site for the most precise and up-to-date information concerning eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on wages paid to all staff members whether they actually 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. If the company had more than 100 employees on average in 2019, then the credit is.
enabled just for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments however also a portion of the cost of employer.
offered health care. Is The Employee Retention Credit Available In 2021
Employers can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.