Lets talk first about Employee Retention Credit 2021 Qualified Wages :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly supply a lovely breakfast and have people really learn more about the program we should head to the space where we have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I suggest you understand if you simply start to take a 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 mean 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 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 consumer 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 don’t pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their savings account and they can really trust Wonder trust that the procedure has been finished and the number of 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 plainly they understand what they’re doing and that’s what you need you require professionals 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 talking about something actually essential today the staff member retention credit which the majority of you have actually never ever become aware of I certainly had not heard of it until extremely recently and discovered a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have staff members 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 call 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 have actually ended up being yes the Ambassador and paid representative for this I love this program it’s going away soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund okay go on sorry I simply have to make certain we got that point I suggest that’s a big difference a loan versus money cash 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 gorgeous hard check in the mail where you get real cash from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s employee retention credit that individual needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have owned a service however it’s based upon you having W-2 staff members 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 eligible 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 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus because the mayhem 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 up to five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 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 caveat here the PPP money would need to be decreased 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 cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment 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 internal revenue service so it’s substantial certainly now the huge concern is why does no one learn about this due to the fact that look when I initially heard about this when I initially satisfied Josh you know I have actually got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it due to the fact that I utilize 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 been worthy of and we utilized them wisely to stay alive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even contacted us to my politician friends Guv Senators they didn’t understand about it I mean that’s how you know that’s how false information is that there’s no info out there then a bunch of people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s intriguing you’re discussing 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 nation and they would process procedure 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 since keep in mind in the initial cares act you could not do both programs so if you had actually 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 due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever 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 done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member 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 up to $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, company whose company is fully or partly suspended.
decline by more than 50%.
1. The credit is 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.
companies who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by federal 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.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing help normally provide know-how and assistance to help organizations browse the intricate procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Qualified Wages
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based on aspects such as your industry, income, and operations. They can help figure out if you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare.
Documents and Calculation: ERC filing services will help in gathering the needed documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based on eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the essential kinds and paperwork in your place. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have developed gradually. These business remain upgraded with the current changes and guarantee that your filings comply with the most existing guidelines. If the Internal revenue service demands additional info or conducts an audit related to your ERC claim, they can also offer ongoing assistance.
It is necessary to research and vet any company offering ERC filing support to ensure their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax specialists who use ERC filing support.
Remember that while these companies can provide important assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage organizations to keep and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, companies need to meet one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the 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% decrease in gross invoices 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 is equal to a percentage (as much as 70%) of certified wages paid to staff members, including specific 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: Initially, companies that received an Income Protection Program (PPP) loan were not qualified for the ERC. 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 declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, allowing eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to amend prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC arrangements and eligibility requirements have actually progressed in time. The best course of action is to seek advice from a tax professional or check out the main internal revenue service website for the most updated and detailed information concerning the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, a company must satisfy among the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and companies that got a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC includes completing the needed types and including the credit on your employment income tax return (typically Form 941). The exact time it takes to process the credit can differ based upon numerous elements, consisting of the intricacy of your service and the workload of the IRS. It’s recommended to consult with a tax professional for guidance specific to your situation.
There are a number of business that can assist with the process of claiming the ERC. Some widely known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon basic understanding and may not show the most recent updates or changes to the ERC. It is essential to speak with a tax professional or go to the main internal revenue service website for the most accurate and updated info regarding eligibility, declaring treatments, and available help.
Less than 100. If the company had 100 or less workers 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.
staff members worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
allowed just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not simply money payments but also a portion of the expense of employer.
provided healthcare. Employee Retention Credit 2021 Qualified Wages
Employers can be instantly compensated for the credit by lowering the quantity of payroll taxes they.