Lets talk first about Consolidated Appropriations Act 2021 Employee Retention Credit :
Our team here what do these men doing everybody in this space is assisting teach people about ERC and uh always supply a lovely breakfast and have individuals really find out about the program we must head to the space where we have the ability to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I imply you know if you just start to take a 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 suggest it’s just I imply consider the number of actual customers 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 consumer so that’s how you’re able to track it you know when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything until they in fact get the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their bank account and they can truly trust Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed since you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’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 Terrific here you’re at my YouTube channel we’re discussing something truly important today the worker retention credit which most of you have actually never heard of I certainly had not heard of it up until really recently and discovered a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 contact your bank supervisor and say offer me a loan it does not 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’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to discover 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 came up with the cares Act and the cares act provided businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund okay go on sorry I simply have to make certain we got that point I indicate that’s a huge difference a loan versus money money 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 original cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get real cash from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that individual had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have actually owned a business 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 need 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 stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. fine 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 cash 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 precise Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average 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 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 IRS so it’s huge clearly now the huge concern is why does nobody know about this because appearance when I first heard about this when I first fulfilled Josh you know I have actually got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many many investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I don’t think it because 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 carefully to stay alive during the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my politician pals Guv Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody understand about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan process 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 country 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 remember in the original cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never 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 ever 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 company your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate clients have actually worked with bottom line to recuperate other federal government programs we have actually 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 employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
employer whose business is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers no matter size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is fully or partly 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 equivalent quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that focus on ERC filing help usually provide expertise and assistance to help organizations navigate the complex process of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Consolidated Appropriations Act 2021 Employee Retention Credit
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based on elements such as your market, earnings, and operations. They can help determine if you meet the requirements for the credit and identify the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will help in collecting the needed documentation, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit quantity based upon eligible earnings and other certifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can examine your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you change previous tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the necessary forms and paperwork on your behalf. This includes finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved over time. These business stay updated with the current changes and ensure that your filings adhere to the most current standards. They can likewise supply ongoing support if the IRS requests extra details or conducts an audit related to your ERC claim.
It is essential to research study and veterinarian any company using ERC filing help to guarantee their trustworthiness and proficiency. Try to find recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax specialists who use ERC submitting support.
Bear in mind that while these business can supply valuable help, it’s always a great idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure 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 measures. The goal of the ERC is to encourage services to keep and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers should fulfill one of two criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of certified salaries paid to employees, consisting of certain health plan expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. The same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting eligible employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for services to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have evolved gradually. The best course of action is to speak with a tax professional or visit the main internal revenue service website for the most up-to-date and comprehensive information regarding the ERC, including any recent legal changes or updates.
To qualify for the ERC, a service needs to satisfy one of the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and services that got a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC includes finishing the essential forms and including the credit on your work income tax return (typically Type 941). The exact time it takes to process the credit can differ based on several aspects, including the intricacy of your organization and the workload of the IRS. It’s suggested to consult with a tax professional for assistance particular to your circumstance.
There are several business that can help with the process of declaring the ERC. Some popular companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based on basic understanding and might not show the most current updates or modifications to the ERC. It is essential to seek advice from a tax expert or go to the official internal revenue service site for the most current and precise info regarding eligibility, claiming treatments, and available support.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all workers whether they actually worked or not. To put it simply, even if the.
workers worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments but likewise a portion of the cost of employer.
supplied healthcare. Consolidated Appropriations Act 2021 Employee Retention Credit
Companies can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.