Lets talk first about Can You Still Claim Employee Retention Credit For 2020 :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh always provide a lovely breakfast and have individuals truly find out about the program we need to head to the room where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I indicate you know if you just begin to take a 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 just I mean think of 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 verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able 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 until they actually get the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their bank account and they can truly trust Wonder trust that the process has actually been completed and the number of you believe you have actually processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require you need experts 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 actually important today the employee retention credit which most of you have actually never ever heard of I certainly had not heard of it until extremely recently and learned a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members between five 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 Principles 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 just contact your bank manager and say give 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 have actually ended up being yes the Ambassador and paid spokesperson 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 just begin there so during the Trump Administration when President Trump was enacted they came up with 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 practically everyone it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I simply need to make certain we got that point I indicate that’s a huge difference a loan versus money money I like cash money that’s what we’re discussing okay 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 hard check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s staff member 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 shareholders it’s for workers right you needed to have owned an organization but it’s based on you having W-2 workers in America not 10.99. so 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 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk 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. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the turmoil of the pandemic so they wished to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 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 need 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 usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the huge concern is why does no one learn about this since look when I initially became aware of this when I first fulfilled Josh you understand I have actually got great deals of investments in lots of companies I’m a major supporter for entrepreneurship in America and make many lots of investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I do not believe it due to the fact that 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 utilized them sensibly to survive during the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan procedure 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 huge 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 simply process procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the original 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 government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it before 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 accounting professional no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big huge business customers have actually worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Since of COVID-19 or whose gross invoices, company whose business is totally or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully 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 comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether a company had, typically, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support normally supply competence and support to help services browse the complex process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Can You Still Claim Employee Retention Credit For 2020
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon elements such as your market, profits, and operations. They can assist determine if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Paperwork and Computation: ERC filing services will assist in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit amount based upon qualified earnings and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you amend previous income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the necessary types and documentation in your place. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed in time. These business remain upgraded with the most recent changes and make sure that your filings comply with the most existing guidelines. They can likewise supply continuous assistance if the IRS demands additional information or carries out an audit related to your ERC claim.
It’s important to research and vet any business offering ERC filing support to ensure their reliability and knowledge. Look for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who provide ERC submitting support.
Bear in mind that while these business can supply valuable support, it’s always an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and make sure accurate filings.
The Staff Member 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 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 employers, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, employers should meet one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed previously, for 2021, a substantial 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 specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline 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 quantity is equal to a portion (approximately 70%) of certified earnings paid to employees, consisting of certain health plan costs. 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 received a Paycheck Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they got a PPP loan. The very same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, enabling qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, typically Kind 941. The excess can be refunded to the employer if the credit exceeds the quantity of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually evolved over time. The very best strategy is to talk to a tax expert or visit the main IRS website for the most updated and comprehensive information regarding the ERC, including any recent legal modifications or updates.
To qualify for the ERC, an organization should fulfill among the following requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is defined 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 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, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and organizations that got a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC includes completing the necessary types and consisting of the credit on your work tax return (normally Form 941). The exact time it takes to process the credit can vary based on a number of aspects, including the complexity of your company and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance specific to your situation.
There are several companies that can help with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some widely known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these business directly to ask about their charges and services.
Please keep in mind that the information provided here is based on basic understanding and might not show the most current updates or modifications to the ERC. It’s important to seek advice from a tax professional or go to the official internal revenue service website for the most accurate and up-to-date details concerning eligibility, claiming procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on earnings paid to all staff members whether they really worked or not. Simply put, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but also a portion of the cost of company.
supplied health care. Can You Still Claim Employee Retention Credit For 2020
Employers can be instantly reimbursed for the credit by reducing the quantity of payroll taxes they.