Lets talk first about Eligibility For Employee Retention Credit 2021 :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly offer a gorgeous breakfast and have people really discover the program we need to head to the room where we have the ability to display a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I mean you know if you just start to 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 indicate it’s simply I imply consider the number of real clients 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 confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until 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 method they transfer it into their savings account and they can genuinely trust Wonder trust that the process has been completed and the number of you believe you have actually processed because 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 one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something really important today the employee retention credit which most of you have actually never heard of I definitely had not become aware of it until extremely just recently and discovered a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call 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 inform 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 enjoy this program it’s going away very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just need to make certain we got that point I indicate that’s a big difference a loan versus money cash I like money money that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works since it seems like to me if it’s a if it’s worker retention credit that person needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have owned a company but it’s based on you having W-2 workers in America not 10.99. 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 very first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you need to be on the W-2 during 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 six quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that 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 up to 5 thousand Max and after that what takes place 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 6 thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caution here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s state 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 IRS so it’s big certainly now the big concern is why does no one learn about this since look when I initially heard about this when I initially met Josh you know I’ve got lots of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of lots of investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I don’t believe it since I use 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 throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody understand about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin due to the fact that 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 big banks in our country and they would process process 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 chaos due to the fact that remember in the original cares act you could not do both programs so if you had actually done PPP you could not do ERC in the initial 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 federal government never ever made it clear to any person about how to.
do this does your CFO know how to do this not truly he or she’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually been in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate customers have actually worked with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose service is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies regardless of 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 Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, on average, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help usually provide competence and assistance to assist organizations browse the complex procedure of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Eligibility For Employee Retention Credit 2021
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based upon factors such as your market, profits, and operations. They can assist determine if you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare.
Documentation and Estimation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit amount based upon eligible wages and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to recognize possible chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the needed kinds and documentation on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have evolved in time. These business stay updated with the latest changes and make sure that your filings comply with the most current standards. They can also offer continuous assistance if the IRS requests extra info or performs an audit related to your ERC claim.
It is very important to research and veterinarian any business offering ERC filing help to ensure their credibility and proficiency. Look for recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax experts who use ERC filing support.
Bear in mind that while these business can offer valuable assistance, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage businesses to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, employers should meet one of two criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As mentioned earlier, 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 considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of qualified salaries paid to employees, including certain health plan costs. 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, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. The same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, permitting eligible employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to modify prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the quantity of work taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have developed over time. The very best course of action is to consult with a tax professional or go to the main internal revenue service site for the most updated and comprehensive information relating to the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, a company must fulfill one of the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline 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 available to services of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and businesses that received a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC involves completing the necessary kinds and including the credit on your work income tax return (normally Type 941). The exact time it requires to process the credit can vary based on a number of aspects, including the intricacy of your organization and the work of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your scenario.
There are a number of business that can help with the process of claiming the ERC. Some widely known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon general knowledge and may not reflect the most current updates or modifications to the ERC. It is very important to talk to a tax expert or go to the main internal revenue service website for the most up-to-date and precise details regarding eligibility, claiming treatments, and readily available assistance.
Less than 100. If the company had 100 or less workers usually in 2019, then the credit is based.
on incomes paid to all staff members 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 company had more than 100 workers on average in 2019.
enabled only for wages paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but also a part of the expense of company.
supplied healthcare. Eligibility For Employee Retention Credit 2021
Employers can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.