Lets talk first about Employee Retention Credit 2021 Gross Receipts Test :
Our group here what do these men doing everyone in this space is assisting teach individuals about ERC and uh constantly provide a gorgeous breakfast and have people actually learn about the program we must head to the room where we have the ability to show a few 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 countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I mean you know if you simply begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I indicate think about the number of actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability 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 do not pay anything up until they really get the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the process has been completed and how many you think you’ve processed because you began 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 need you require 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 really essential today the staff member retention credit which most of you have never become aware of I definitely had not heard of it up until very just recently and discovered a lot about it because this is probably the most affordable expense of capital for any small company anywhere
anytime if you have staff members 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 Principles 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 just call your bank manager and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all 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 learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses 3 chances 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 precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund all right go on sorry I just have to ensure we got that point I indicate that’s a huge difference a loan versus cash cash I like money cash 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 stunning difficult check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person had to be a worker so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have actually owned an organization but it’s based on you having W-2 employees 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 eligible 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 right so there were 6 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 determined you need to be on the W-2 throughout that period now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per worker 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 take place um they simply altered the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create 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 since that’s a great deal 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 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say 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 substantial certainly now the huge concern is why does nobody learn about this since look when I initially became aware of this when I initially met Josh you know I have actually got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I do not think it since 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 wisely to stay alive throughout 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 political leader buddies Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin because 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 nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was mayhem due to the fact that keep in mind in the original cares act you might not do both programs so if you had done PPP you could refrain from doing 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 government never made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big huge business customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose service is totally or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is fully 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 comparable quarter in 2019. As soon as the.
employer’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 quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing support typically supply know-how and assistance to assist services browse the intricate procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Gross Receipts Test
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based upon factors such as your industry, earnings, and operations. They can assist determine if you satisfy the requirements for the credit and identify the optimum credit quantity you can claim.
Documents and Computation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based upon qualified wages and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to identify possible chances for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the needed types and documents on your behalf. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have evolved in time. These companies remain upgraded with the most recent modifications and make sure that your filings comply with the most current standards. They can likewise supply continuous support if the internal revenue service demands extra information or carries out an audit related to your ERC claim.
It is essential to research and vet any company providing ERC filing help to guarantee their credibility and expertise. Search for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax specialists who provide ERC filing assistance.
Keep in mind that while these companies can offer valuable assistance, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure 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 objective of the ERC is to motivate organizations to maintain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, employers should meet one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As pointed out 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 significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified wages paid to employees, including certain health plan expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. The very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing qualified employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Kind 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have evolved in time. The very best course of action is to seek advice from a tax expert or visit the official IRS site for the most in-depth and current information concerning the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, an organization needs to satisfy among the following requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant 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.
The ERC is offered to businesses of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and companies that got a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC includes finishing the needed kinds and consisting of the credit on your employment income tax return (generally Kind 941). The exact time it takes to process the credit can vary based on several aspects, consisting of the complexity of your company and the work of the internal revenue service. It’s recommended to consult with a tax professional for guidance particular to your situation.
There are several companies that can assist with the process of declaring the ERC. Some widely known business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based upon basic understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to talk to a tax expert or go to the official IRS site for the most up-to-date and precise information regarding eligibility, declaring procedures, and available assistance.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on wages 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. If the company had more than 100 employees typically in 2019, then the credit is.
permitted only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments however likewise a portion of the expense of employer.
supplied healthcare. Employee Retention Credit 2021 Gross Receipts Test
Companies can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.