Lets talk first about Employee Retention Credit 2020 And Ppp :
Our group here what do these men doing everybody in this room is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals actually find out about the program we need to head to the space where we are able to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I mean you know if you just start 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 indicate it’s simply I imply consider the number of real customers 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 internal revenue service heading to the client so that’s how you have the ability to track it you know when you
receive this you understand the check is opted for sure which’s when they pay so they do not pay anything until they really get the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the procedure has been finished and how many you think you’ve processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 Fantastic here you’re at my YouTube channel we’re speaking about something really essential today the worker retention credit which most of you have never become aware of I certainly hadn’t become aware of it until really recently and discovered a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 simply phone your bank supervisor 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 us all about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to find out all about it let’s talk employee 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 organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge 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 okay go on sorry I just need to ensure we got that point I mean that’s a big difference a loan versus cash money I like money money that’s what we’re talking about 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 original cares Act is the ERC and yes Kevin it is a beautiful 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 sounds like to me if it’s a if it’s employee retention credit that individual needed to be a staff member 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 staff members right you had to have actually owned a business but it’s based on you having W-2 staff members 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 first six months of 2021 on the W-2 right 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 2 and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you return per staff member 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 income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the turmoil 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 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member 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 decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 thousand dollars a person 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 internal revenue service so it’s big undoubtedly now the big question is why does no one learn about this because look when I initially heard about this when I first fulfilled Josh you know I have actually got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many lots of investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I do not believe it since 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 and that were well should have and we utilized them wisely to stay alive during the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even called to my political leader pals Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that 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 nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was chaos due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they altered 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 government never made it clear to anybody about how to.
do this does your CFO know how to do this not really he or she’s never done it previously do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never done this prior to unless you have an account that went into this service and bottom line my firm Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property 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 workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose organization is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined 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 comparable quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing assistance typically supply proficiency and support to assist companies navigate the complex procedure of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2020 And Ppp
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based on aspects such as your market, income, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can help figure out.
Documentation and Calculation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based on qualified earnings and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can examine your past payroll records and financials to determine prospective chances for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the needed forms and documentation on your behalf. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have actually developed with time. These business stay updated with the latest changes and guarantee that your filings comply with the most current standards. They can likewise offer continuous support if the internal revenue service requests additional info or conducts an audit related to your ERC claim.
It is essential to research and vet any business using ERC filing assistance to guarantee their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who offer ERC submitting support.
Bear in mind that while these business can supply important support, it’s always a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure precise 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 retain and pay their workers during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To certify, companies must meet one of two requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As pointed out previously, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified earnings paid to employees, including specific health insurance expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, allowing qualified employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for businesses to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Form 941. The excess can be reimbursed to the company if the credit surpasses the amount of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have actually evolved in time. The best strategy is to speak with a tax expert or go to the official internal revenue service website for the most in-depth and updated information concerning the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a company should meet among the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the very 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 invoices compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and companies that received a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the essential types and consisting of the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can differ based upon numerous elements, including the intricacy of your company and the workload of the internal revenue service. It’s suggested to seek advice from a tax professional for guidance particular to your circumstance.
There are numerous companies that can assist with the process of claiming the ERC. Some popular business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon general knowledge and may not reflect the most current updates or modifications to the ERC. It’s important to speak with a tax professional or check out the main internal revenue service site for the most precise and updated info relating to eligibility, claiming treatments, and available support.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
workers 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 typically in 2019, then the credit is.
permitted just for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not just cash payments but also a portion of the expense of employer.
offered health care. Employee Retention Credit 2020 And Ppp
Companies can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.