Lets talk first about Employee Retention Credit 2021 Safe Harbor :
Our team here what do these men doing everybody in this space is helping teach individuals about ERC and uh always provide a lovely breakfast and have people really find out about the program we should head to the room where we have the ability 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 countless dollars literally Kevin numerous countless dollars so these are replicate 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 take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I mean think about 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 verified the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they don’t pay anything up until they really get the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the procedure has actually been completed and the number of you think you have actually 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 need you require 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 Wonderful here you’re at my YouTube channel we’re discussing something truly important today the worker retention credit which most of you have actually never become aware of I certainly had not heard of it up until very just recently and discovered a lot about it due to the fact that this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers in 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call your bank supervisor and say offer me a loan it doesn’t 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 enjoy this program it’s going away very 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 developed 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 nearly 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.
remedy the money cash payroll tax refund alright go on sorry I simply have to make certain we got that point I imply that’s a huge difference a loan versus money money I like money money that’s what we’re discussing all right 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 gorgeous difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works since it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have actually owned a service but it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 correct 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. fine so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my preferred part cash 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 salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the turmoil of the pandemic so they wished to even get more to keep those staff members 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 come up with twenty six 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 caution here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge certainly now the huge question is why does no one understand about this due to the fact that appearance when I initially became aware of this when I initially fulfilled Josh you know I’ve got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of many investments in business owners of which many suffered through the pandemic when I initially found out 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 deserved and we utilized them wisely to stay alive during the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader friends Governor Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s interesting you’re talking about the banks Kevin because in the PPP loan procedure 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 process process that’s all um and here there was chaos due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually 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 due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually he or she’s never done it previously 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 business your accountant no your accountant’s never done this before unless you have an account that went into this business and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge business customers have actually dealt with bottom line to recover 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 encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose business is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings differs by whether a company had, usually, basically than.
100 employees in 2019.
Business that focus on ERC filing support usually provide competence and support to assist organizations browse the intricate procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Safe Harbor
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can claim, they can assist determine.
Documentation and Calculation: ERC filing services will assist in collecting the needed documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit quantity based on eligible earnings and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to determine potential opportunities for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the necessary types and documents in your place. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually developed over time. These companies stay updated with the current modifications and ensure that your filings comply with the most present guidelines. If the IRS requests additional details or carries out an audit related to your ERC claim, they can also offer ongoing support.
It is very important to research and vet any business using ERC filing assistance to ensure their credibility and proficiency. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who use ERC filing assistance.
Remember that while these companies can offer important support, it’s constantly a good concept to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and guarantee accurate filings.
The Employee 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 encourage companies to keep and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, companies need to meet one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As mentioned earlier, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of qualified earnings paid to workers, consisting of specific health insurance expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. However, the exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, enabling eligible employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to amend prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, usually Form 941. The excess can be refunded to the employer if the credit surpasses the quantity of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have developed over time. The very best strategy is to consult with a tax expert or visit the official internal revenue service website for the most detailed and updated info relating to the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a company must meet one of the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and services that received a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC involves finishing the required types and including the credit on your work tax return (usually Type 941). The exact time it takes to process the credit can differ based upon numerous factors, consisting of the complexity of your organization and the work of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your situation.
There are several business that can assist with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these companies straight to inquire about their services and charges.
Please note that the details provided here is based on basic knowledge and might not show the most recent updates or modifications to the ERC. It is very important to consult with a tax expert or go to the main internal revenue service website for the most updated and precise info relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on wages paid to all employees whether they really worked or not. Simply put, even if the.
employees worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not just money payments but likewise a part of the expense of employer.
provided health care. Employee Retention Credit 2021 Safe Harbor
Employers can be immediately compensated for the credit by decreasing the amount of payroll taxes they.