Lets talk first about Employee Retention Credit For New Business Started In 2020 :
Our group here what do these men doing everyone in this room is helping teach people about ERC and uh constantly provide a lovely breakfast and have people actually learn 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 ‘d like to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I indicate you know if you simply start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean think about how many actual customers 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 IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you know the check is chosen sure and that’s when they pay so they don’t pay anything until they actually get the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their bank account and they can genuinely rely on Wonder trust that the process has actually been completed and how many you believe you’ve processed since 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 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 among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re speaking about something actually crucial today the worker retention credit which the majority of you have actually never heard of I certainly hadn’t heard of it till extremely just recently and found out a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 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 inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to find out all about it let’s talk staff member 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 used 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 big distinction 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 alright go on sorry I just have to make sure we got that point I indicate that’s a big distinction a loan versus money money I like cash cash that’s what we’re speaking about okay 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 discuss how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that person had to be a worker so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have actually owned a company but it’s based on 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 right so there were 6 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 two and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part cash 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 specific Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished 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 happens 21 000 Max in 2021 oh that’s how you develop 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 because 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 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big clearly now the big question is why does nobody know about this due to the fact that appearance when I first heard about this when I first satisfied Josh you understand I have actually got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make numerous many investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t think it due to the fact that I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them wisely to survive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin since 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 country 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 chaos since keep in mind in the original 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 not doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not truly she or he’s never done it in the past 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 accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
company whose company is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices go above 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 salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying wages differs by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing help typically provide know-how and assistance to assist organizations browse the complex procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit For New Business Started In 2020
Eligibility Assessment: These companies will assess your business’s eligibility for the ERC based on elements such as your industry, profits, and operations. They can assist figure out if you fulfill the requirements for the credit and determine the maximum credit amount you can declare.
Paperwork and Calculation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit quantity based upon eligible incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can examine your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the essential forms and paperwork in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have developed in time. These companies stay upgraded with the latest modifications and make sure that your filings comply with the most current standards. If the IRS demands additional info or performs an audit associated to your ERC claim, they can also supply ongoing assistance.
It is very important to research and vet any company offering ERC filing help to guarantee their reliability and expertise. Try to find established firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Bear in mind that while these companies can supply important help, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure 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 services to keep and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers should meet one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out previously, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of certified wages paid to staff members, consisting of specific health plan expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they received a PPP loan. The same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing qualified employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC provisions and eligibility criteria have evolved gradually. The best course of action is to consult with a tax professional or visit the main internal revenue service website for the most up-to-date and in-depth info relating to the ERC, including any current legislative changes or updates.
To receive the ERC, an organization must meet one of the following criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, however there are some exceptions. For example, government entities and companies that received a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC involves completing the necessary types and including the credit on your work income tax return (usually Form 941). The exact time it takes to process the credit can differ based on numerous factors, including the complexity of your organization and the work of the IRS. It’s advised to seek advice from a tax expert for guidance particular to your circumstance.
There are a number of companies that can help with the procedure of claiming the ERC. Some well-known business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on general knowledge and might not reflect the most recent updates or changes to the ERC. It’s important to seek advice from a tax professional or go to the official IRS site for the most accurate and updated details relating to eligibility, claiming procedures, and available support.
Less than 100. If the company had 100 or less staff members usually in 2019, then the credit is based.
on earnings paid to all employees whether they really worked or not. In other words, 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.
allowed only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments but likewise a portion of the cost of employer.
supplied health care. Employee Retention Credit For New Business Started In 2020
Employers can be immediately repaid for the credit by minimizing the amount of payroll taxes they.