Lets talk first about Employee Retention Credit 2021 Q3 :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have people truly learn about the program we ought to head to the room where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I mean you understand if you simply begin to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I indicate consider how many real clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you know when you
receive this you understand the check is gone for sure and that’s when they pay so they do not pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their bank account and they can genuinely trust Wonder trust that the process has been completed and how many you believe you have actually processed because you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you need specialists 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 crucial today the employee retention credit which the majority of you have never ever become aware of I certainly hadn’t become aware of it until very just recently and found out a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations 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.
remedy the money money payroll tax refund all right go on sorry I simply have to make sure we got that point I suggest that’s a big difference a loan versus cash money I like money money that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s worker retention credit that individual had to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have owned a service however it’s based on you having W-2 staff members 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 need 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 six quarters the program was open well stroll us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s salary 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 wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the turmoil 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 up to 5 thousand Max and then what takes place 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 6 thousand dollars per employee that is because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees 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 no one learn about this since appearance when I first found out about this when I initially satisfied Josh you know I’ve got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous many investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it because I use the PPP we went through the money 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 deserved and we used them sensibly to survive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a lot of individuals told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 chaos since remember in the original cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before 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 accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my firm Kevin has actually been in business given that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have actually worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose business is completely or partly suspended.
decline by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is totally or partly suspended by 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. Once the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages differs by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing assistance normally provide knowledge and assistance to assist businesses browse the complicated procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Q3
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon aspects such as your industry, income, and operations. They can help figure out if you fulfill the requirements for the credit and determine the optimum credit quantity you can declare.
Documentation and Estimation: ERC filing services will help in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based on qualified wages and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the essential types and documents in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually progressed over time. These business remain upgraded with the most recent changes and guarantee that your filings abide by the most existing standards. They can likewise offer ongoing support if the IRS requests extra information or conducts an audit related to your ERC claim.
It is necessary to research study and veterinarian any company providing ERC filing assistance to guarantee their credibility and knowledge. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax specialists who offer ERC filing assistance.
Bear in mind that while these business can supply important assistance, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate organizations to retain 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 available to qualified companies, consisting of for-profit organizations, tax-exempt organizations, and particular governmental entities. To certify, employers must fulfill one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decline in gross receipts 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 same quarter in 2019, or a 20% decrease 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 is equal to a percentage (approximately 70%) of certified earnings paid to staff members, consisting of certain 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: Initially, organizations that got an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. However, the very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, enabling qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Type 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 arrangements and eligibility requirements have progressed in time. The very best course of action is to consult with a tax expert or go to the main internal revenue service website for the most current and detailed information relating to the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a company must satisfy one of the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and businesses that got a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC involves completing the required kinds and including the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon several factors, including the intricacy of your business and the work of the IRS. It’s recommended to speak with a tax expert for assistance particular to your scenario.
There are numerous companies that can aid with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these companies straight to ask about their fees and services.
Please keep in mind that the info supplied here is based upon basic knowledge and might not reflect the most current updates or changes to the ERC. It’s important to talk to a tax expert or go to the official IRS website for the most accurate and updated info regarding eligibility, declaring treatments, and available help.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. Simply put, 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 company had more than 100 workers typically in 2019, then the credit is.
enabled just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments but also a part of the cost of company.
provided health care. Employee Retention Credit 2021 Q3
Employers can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.