Lets talk first about Employee Retention Credit 2021 Qualifications :
Our group here what do these guys doing everybody in this room is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals actually learn more about the program we need to head to the space where we are able to show a few 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 clients validating that the check is on the way I indicate you know if you just start to 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 imply it’s simply I indicate consider how many 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 validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they in fact get the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their bank account and they can genuinely trust Wonder trust that the process has actually been completed and the number of you think you’ve processed considering that 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 require you need professionals 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 actually important today the worker retention credit which most of you have never become aware of I definitely hadn’t heard of it until really recently and discovered a lot about it due to the fact that this is most likely the lowest expense 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 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 call up your bank supervisor and state 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 have actually become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a huge difference a loan versus cash money I like cash 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 gorgeous difficult check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that individual had to be a worker 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 actually owned a business but 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 very first six months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part money just how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the chaos 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 approximately five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop 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 caveat here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically 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 money you would still get a million dollar in the mail from the internal revenue service so it’s big certainly now the huge concern is why does nobody know about this since appearance when I initially became aware of this when I first satisfied Josh you know I’ve got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make many many investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not think it due to the fact that 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 should have and we utilized them carefully to survive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my political leader good friends Governor Senators they didn’t understand about it I imply that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one understand about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin because 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 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 turmoil due to the fact that keep in mind in the initial cares act you might not do 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 federal government never made it clear to any person about how to.
do this does your CFO understand how to do this not really she or he’s never ever 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 business your accountant no your accounting professional’s never done this before 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 working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge big business clients have dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose organization is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill 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.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether a company had, typically, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing assistance normally provide proficiency and support to assist businesses browse the intricate process of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Qualifications
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help identify if you meet the requirements for the credit and determine the maximum credit quantity you can claim.
Paperwork and Computation: ERC filing services will help in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based upon eligible wages and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify prospective chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the necessary types and documentation on your behalf. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed gradually. These business remain upgraded with the latest modifications and make sure that your filings adhere to the most present guidelines. They can also offer ongoing support if the internal revenue service requests extra details or performs an audit related to your ERC claim.
It is necessary to research and vet any company using ERC filing help to ensure their credibility and knowledge. Look for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax specialists who use ERC filing support.
Bear in mind that while these business can supply valuable assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to maintain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit services, tax-exempt companies, and specific governmental entities. To qualify, companies need to meet one of two 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 invoices. As pointed out earlier, for 2021, a significant 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 defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: 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 (approximately 70%) of certified salaries paid to staff members, consisting of particular health insurance expenses. 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 received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. The exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, allowing qualified employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Form 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have progressed with time. The best course of action is to speak with a tax professional or visit the main internal revenue service website for the most in-depth and updated info concerning the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a business must fulfill among the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline 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 defined as a 20% decrease in gross receipts 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 organizations, but there are some exceptions. For instance, government entities and businesses that got a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC involves completing the needed forms and consisting of the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can differ based on a number of factors, consisting of the intricacy of your service and the work of the internal revenue service. It’s suggested to talk to a tax professional for assistance particular to your circumstance.
There are a number of companies that can help with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some widely known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these business directly to inquire about their services and fees.
Please keep in mind that the information provided here is based upon general understanding and might not reflect the most recent updates or modifications to the ERC. It is essential to seek advice from a tax professional or go to the official IRS site for the most current and precise details regarding eligibility, declaring treatments, and readily available support.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on salaries paid to all employees whether they really worked or not. To put it simply, even if the.
staff members worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not simply cash payments however likewise a part of the expense of employer.
supplied healthcare. Employee Retention Credit 2021 Qualifications
Employers can be immediately compensated for the credit by decreasing the amount of payroll taxes they.