Lets talk first about Employee Retention Credit 2020 And Ppp Loan :
Our group here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh constantly offer a gorgeous breakfast and have individuals really learn more about the program we should head to the space where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I indicate you know if you simply start to take a look at a few 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 just I imply consider 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 verified the numbers are verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything until they actually get the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their bank account and they can really trust Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need specialists 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 speaking about something truly crucial today the worker retention credit which most of you have never heard of I certainly hadn’t heard of it until extremely recently and learned a lot about it because this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call up your bank manager and say give me a loan it does not 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 become yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created 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 almost everybody it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I simply need to ensure we got that point I imply that’s a big distinction a loan versus cash money I like cash cash that’s what we’re talking about 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 tough check in the mail where you get real cash from the IRS all right so let’s speak about 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 person needed to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have owned an organization but it’s based upon you having W-2 workers in America not 10.99. so 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 very first six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the six 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 have to be on the W-2 during that duration now let’s talk my preferred part money just 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 exact Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wished 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 up to five thousand Max and then what takes place 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 staff member that is since that’s a great deal of money it is now there’s a caveat here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 IRS so it’s substantial obviously now the big question is why does no one understand about this since appearance when I first found out about this when I first met Josh you know I have actually got lots of investments in lots of companies I’m a major advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe it due to the fact that I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them wisely to survive during the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even called to my politician pals Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one learn about the employee retention credit you understand what’s interesting you’re discussing the banks Kevin since in the PPP loan process 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was chaos since remember in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not actually she or he’s never done it before 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 company your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has been in business since 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big business clients have worked with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work chance 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 created to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, company whose service is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed 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 below 50% of the similar quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing help normally supply know-how and support to help businesses navigate the complex process of declaring the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2020 And Ppp Loan
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can claim, they can help determine.
Paperwork and Computation: ERC filing services will assist in collecting the needed documents, such as payroll records and financial statements, to support your claim. They will also help calculate the credit quantity based upon eligible salaries and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify potential opportunities for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the required types and documentation in your place. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed in time. These companies stay updated with the latest modifications and make sure that your filings abide by the most present guidelines. They can likewise supply ongoing assistance if the internal revenue service demands additional information or performs an audit related to your ERC claim.
It’s important to research study and veterinarian any business providing ERC filing help to guarantee their credibility and know-how. Try to find established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who use ERC submitting assistance.
Remember that while these companies can supply valuable help, it’s constantly a good idea to have a standard understanding of the ERC requirements and process 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. government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to retain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, employers should satisfy one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a substantial decrease is defined as a 20% decline in gross receipts 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 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 company’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of certified salaries paid to staff members, including certain health insurance expenditures. 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 received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. Nevertheless, the very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually 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 arrangement provides a chance for businesses to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, usually Type 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC provisions and eligibility criteria have developed over time. The very best strategy is to talk to a tax professional or check out the official IRS website for the most updated and detailed info concerning the ERC, including any recent legislative changes or updates.
To receive the ERC, a business should meet among the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease 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 readily available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and companies that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes completing the necessary forms and including the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can differ based upon several aspects, consisting of the intricacy of your organization and the work of the IRS. It’s suggested to speak with a tax expert for assistance specific to your scenario.
There are several companies that can aid with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some popular companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies directly to inquire about their services and costs.
Please note that the info supplied here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It’s important to seek advice from a tax professional or visit the main IRS website for the most updated and precise information regarding eligibility, declaring procedures, and available support.
Less than 100. If the employer had 100 or less workers on average in 2019, then the credit is based.
on wages paid to all employees whether they really worked or not. To put it simply, even if the.
workers worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members typically in 2019, then the credit is.
enabled only for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments but also a portion of the expense of company.
provided healthcare. Employee Retention Credit 2020 And Ppp Loan
Companies can be right away compensated for the credit by decreasing the amount of payroll taxes they.