Lets talk first about What Is Employee Retention Credit 2021 :
Our team here what do these guys doing everyone in this space is assisting teach people about ERC and uh always supply a beautiful breakfast and have people truly learn about the program we ought to head to the space where we are able to display a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I indicate you know if you just start to 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 imply it’s simply I indicate think of 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 IRS heading to the customer so that’s how you’re able to track it you understand when you
get this you know the check is gone for sure which’s when they pay so they don’t pay anything up until they actually receive the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the process has been completed and how many you think you have actually processed since you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you need you need specialists 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 talking about something really important today the employee retention credit which the majority of you have actually never ever heard of I certainly hadn’t become aware of it up until really recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just phone your bank supervisor 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 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 during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I just have to ensure we got that point I indicate that’s a big difference a loan versus money cash 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 beautiful 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 since it seems like to me if it’s a if it’s worker retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned a business but it’s based upon you having W-2 staff members 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 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 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wanted to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 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 worker that is since that’s a lot of money it is now there’s a caution here the PPP cash would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the huge question is why does nobody learn about this because appearance when I initially found out about this when I first met Josh you understand I’ve got great deals of investments in lots of business I’m a major advocate for entrepreneurship in America and make numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it since 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 which were well should have and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody learn about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan procedure 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 big banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was turmoil because remember in the initial 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 changed the law in 2021 the banks were refraining from 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 know how to do this not actually he or she’s never ever done it before 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 done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually been in business since 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose service is totally or partly suspended.
decrease by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether an employer had, typically, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing assistance generally provide expertise and assistance to help businesses browse the complex procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? What Is Employee Retention Credit 2021
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based on elements such as your industry, revenue, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can declare, they can help figure out.
Paperwork and Calculation: ERC filing services will help in collecting the required paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help determine the credit amount based on eligible salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the required kinds and documents in your place. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually progressed with time. These companies remain updated with the current modifications and guarantee that your filings adhere to the most present guidelines. They can likewise supply ongoing support if the IRS demands additional details or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any business offering ERC filing support to guarantee their trustworthiness and know-how. Search for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who offer ERC submitting assistance.
Remember that while these business can provide important assistance, it’s constantly a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate companies to maintain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, companies should fulfill one of two requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out earlier, for 2021, a substantial decrease 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 defined as a 20% decline in gross receipts 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 amounts to a percentage (up to 70%) of qualified wages paid to staff members, consisting of certain health insurance 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: At first, businesses that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. However, the very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, permitting eligible employers to declare the credit for certified salaries 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 claim the ERC by reporting it on their work income tax return, usually Form 941. If the credit surpasses the amount of employment taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC provisions and eligibility requirements have developed in time. The very best course of action is to speak with a tax expert or check out the official internal revenue service website for the most in-depth and current info regarding the ERC, including any recent legal modifications or updates.
To receive the ERC, a company must meet among the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a substantial 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 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 immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and companies that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the necessary types and including the credit on your employment income tax return (usually Form 941). The exact time it requires to process the credit can vary based on several factors, including the intricacy of your company and the work of the IRS. It’s suggested to speak with a tax professional for guidance particular to your situation.
There are a number of companies that can assist with the process of claiming the ERC. Some well-known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based on basic understanding and may not show the most current updates or modifications to the ERC. It is necessary to speak with a tax expert or visit the official IRS site for the most up-to-date and precise info relating to eligibility, claiming treatments, and available help.
Less than 100. If the company had 100 or fewer employees typically in 2019, then the credit is based.
on incomes paid to all employees whether they actually worked or not. In other words, even if the.
employees worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
permitted only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments however also a portion of the cost of company.
provided health care. What Is Employee Retention Credit 2021
Companies can be immediately compensated for the credit by reducing the quantity of payroll taxes they.