Lets talk first about How Much Is The Employee Retention Credit 2021 :
Our team here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have individuals actually learn more about the program we ought to head to the space where we are able 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 millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I mean you understand if you just start to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I imply think about the number of 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 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 understand when you
get this you understand the check is gone for sure which’s when they pay so they do not 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 method they transfer it into their bank account and they can genuinely trust Wonder trust that the process has actually been finished and the number of you think 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 know what they’re doing which’s what you require 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 Terrific here you’re at my YouTube channel we’re discussing something truly essential today the employee retention credit which the majority of you have never heard of I definitely hadn’t become aware of it until extremely just recently and found out a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the expert 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 just call up your bank manager and say provide me a loan it does not 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 become yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services 3 chances 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund okay go on sorry I simply need to make certain we got that point I indicate that’s a huge difference a loan versus cash cash I like cash cash that’s what we’re talking about alright 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 lovely hard check in the mail where you get actual cash 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 Presumption this money 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 company however it’s based upon 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 qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part cash just how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s income to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the turmoil 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 5 thousand Max and after that what happens 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 6 thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually 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 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 internal revenue service so it’s substantial clearly now the huge concern is why does nobody learn about this since look when I first heard about this when I first fulfilled Josh you know I have actually got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I do not believe it because I utilize 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 been worthy of and we utilized them sensibly to stay alive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no info 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 real so let’s ask Josh why does no one learn about the worker retention credit you understand what’s interesting you’re discussing the banks Kevin since in the PPP loan process the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 simply procedure procedure that’s all um and here there was chaos since keep in mind in the initial cares act you might not do 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 not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past 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 company your accounting professional no your accountant’s never ever done this before unless you have an account that went into this company and bottom line my firm Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have worked with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work opportunity 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 developed to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, company whose organization is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by federal 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.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying salaries differs by whether an employer had, typically, basically than.
100 employees in 2019.
Business that specialize in ERC filing help typically offer proficiency and assistance to help businesses browse the complicated process of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? How Much Is The Employee Retention Credit 2021
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based upon elements such as your market, profits, and operations. They can help figure out if you satisfy the requirements for the credit and recognize the optimum credit amount you can declare.
Paperwork and Estimation: ERC filing services will help in gathering the essential documentation, such as payroll records and financial statements, to support your claim. They will also assist compute the credit quantity based upon qualified wages and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to recognize prospective chances for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the needed forms and documents on your behalf. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually progressed gradually. These companies stay updated with the most recent changes and make sure that your filings abide by the most present standards. If the Internal revenue service requests extra info or carries out an audit associated to your ERC claim, they can also provide ongoing assistance.
It is necessary to research and vet any business using ERC filing assistance to ensure their trustworthiness and knowledge. Look for recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who provide ERC submitting assistance.
Bear in mind that while these business can provide important support, it’s constantly a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure precise filings.
The Worker 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 businesses to maintain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, companies should satisfy one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial 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.
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 percentage (up to 70%) of certified earnings paid to staff members, consisting of specific health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. The exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, enabling qualified companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies 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 income tax return, generally Kind 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have progressed over time. The best strategy is to talk to a tax expert or go to the main internal revenue service site for the most in-depth and up-to-date info relating to the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, an organization needs to satisfy among the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a considerable 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 specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, government entities and organizations that received a PPP loan may have limitations on claiming the credit.
The process for declaring the ERC includes completing the needed types and consisting of the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon several elements, including the complexity of your service and the work of the IRS. It’s suggested to talk to a tax professional for guidance specific to your scenario.
There are a number of companies that can help with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some well-known business that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these companies straight to inquire about their services and costs.
Please note that the information supplied here is based on basic knowledge and may not reflect the most current updates or modifications to the ERC. It is necessary to seek advice from a tax professional or visit the official IRS site for the most up-to-date and precise details regarding eligibility, declaring procedures, and offered help.
Less than 100. If the employer had 100 or less employees usually in 2019, then the credit is based.
on wages paid to all employees whether they in fact worked or not. In other words, even if the.
employees worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments but also a portion of the expense of company.
supplied healthcare. How Much Is The Employee Retention Credit 2021
Employers can be right away compensated for the credit by minimizing the quantity of payroll taxes they.