Lets talk first about Notice 2021-20 Employee Retention Credit :
Our group here what do these men doing everyone in this room is assisting teach people about ERC and uh always offer a lovely breakfast and have people truly learn more about the program we must head to the space where we have the ability to show a few of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I indicate you know if you simply start 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 suggest it’s simply I indicate think about how many actual clients 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 validated 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 understand when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything up until they really receive the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their savings account and they can truly rely on Wonder trust that the process has been finished and the number of you think you have actually processed since you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you need professionals 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 Wonderful here you’re at my YouTube channel we’re discussing something truly crucial today the worker retention credit which most of you have actually never heard of I certainly had not heard of it till really just recently and discovered a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 call your bank supervisor 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 have actually become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to learn all 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 created the cares Act and the cares act provided businesses 3 chances 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 two 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 simply have to make certain we got that point I indicate that’s a huge distinction a loan versus cash cash I like money cash that’s what we’re discussing 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 real cash from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee 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 individuals on the cap table not for investors it’s for staff members right you needed to have owned a company however 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 first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the chaos of the pandemic so they wanted 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 as much as 5 thousand Max and then what happens 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 six thousand dollars per worker that is because that’s a lot of cash 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 two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New York 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 substantial undoubtedly now the huge concern is why does nobody know about this because look when I initially became aware of this when I initially met Josh you know I have actually got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t believe it due to the fact that 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 which were well should have and we used them sensibly to survive 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 politician good friends Governor Senators they didn’t understand 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 also not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin since 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 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 simply process procedure that’s all um and here there was mayhem due to the fact that keep in mind in the initial cares act you could not do both programs so if you had done PPP you might refrain from doing 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 anybody about how to.
do this does your CFO know how to do this not actually she or he’s never done it in the past 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 accountant no your accountant’s never ever done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose company is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying earnings varies by whether a company had, usually, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing support normally offer competence and assistance to help businesses navigate the complicated procedure of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Notice 2021-20 Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based on factors such as your industry, revenue, and operations. If you meet the requirements for the credit and recognize the maximum credit amount you can claim, they can help determine.
Documentation and Calculation: ERC filing services will help in gathering the necessary documents, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit quantity based on qualified earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to identify possible opportunities for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the necessary forms and documentation in your place. This includes finishing 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 current changes and make sure that your filings abide by the most present standards. They can likewise offer ongoing support if the IRS requests additional details or conducts an audit related to your ERC claim.
It’s important to research and vet any business providing ERC filing help to guarantee their reliability and competence. Search for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who offer ERC filing assistance.
Keep in mind that while these companies can provide important support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure accurate filings.
The Employee 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 organizations to maintain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies must satisfy one of two criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease 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 substantial decline is specified as a 20% decrease in gross invoices 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 company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of qualified incomes paid to employees, consisting of specific health plan costs. The maximum 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, organizations that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. The same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting eligible employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to amend prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, typically Kind 941. The excess can be refunded to the company if the credit goes beyond the amount of work taxes owed.
It’s important to note that the ERC arrangements and eligibility criteria have actually progressed over time. The very best course of action is to speak with a tax professional or check out the official internal revenue service site for the most in-depth and current details relating to the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a business must fulfill one of the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant 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 immediately preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and companies that got a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC includes completing the required types and consisting of the credit on your employment tax return (typically Form 941). The exact time it takes to process the credit can vary based on a number of elements, consisting of the intricacy of your business and the workload of the IRS. It’s suggested to talk to a tax professional for guidance specific to your situation.
There are numerous business that can assist with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some popular business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these companies directly to ask about their charges and services.
Please note that the info supplied here is based upon general knowledge and may not show the most recent updates or changes to the ERC. It is essential to consult with a tax professional or visit the official IRS website for the most current and precise details regarding eligibility, claiming procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on salaries paid to all workers whether they really worked or not. In other words, even if the.
employees worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
allowed only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply cash payments but likewise a portion of the expense of company.
supplied health care. Notice 2021-20 Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.