Lets talk first about Employee Retention Credit 2021 Guidance :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh constantly supply a stunning breakfast and have people really learn more about the program we must head to the room where we have the ability 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 actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I mean you know if you simply begin 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 indicate it’s just I imply think about the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified 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’re able to track it you know when you
receive this you know the check is gone for sure and that’s when they pay so they do not pay anything up until they in fact get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their checking account and they can really rely on Wonder trust that the process has actually been finished and the number of you believe you have actually processed given that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require you require professionals 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 Terrific here you’re at my YouTube channel we’re speaking about something really important today the staff member retention credit which most of you have actually never ever heard of I certainly hadn’t heard of it up until extremely just recently and learned a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve 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 difficult this isn’t like PPP we simply contact your bank manager and state provide me a loan it doesn’t 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 ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I just need to make certain we got that point I suggest that’s a huge distinction a loan versus money money I like cash cash that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual 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 person had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned a company but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 employees and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and four 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 preferred part money how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s wage to a maximum 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 occur um they just changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted 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 develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot 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 reduce the 26 000 so what we’re seeing usually 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 where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the huge question is why does nobody learn about this because look when I initially heard about this when I initially fulfilled Josh you know I’ve got great deals of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a lot 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 learn about the staff member retention credit you understand what’s interesting you’re talking about 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 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 simply process procedure that’s all um and here there was chaos due to the fact that remember in the initial cares act you could not do both programs so if you had done PPP you could not do ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this organization and bottom line my company Kevin has been in business because 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 corporate customers have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed 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 business is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. When the.
company’s gross invoices exceed 80% of a comparable 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 certifying wages paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying wages varies by whether a company had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance generally provide expertise and assistance to help organizations navigate the complex process of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Guidance
Eligibility Assessment: These companies will assess your business’s eligibility for the ERC based on aspects such as your market, earnings, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can assist determine.
Documentation and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit amount based on qualified earnings and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to determine potential chances for retroactive credits. They can assist you change prior tax returns to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the essential kinds and documentation on your behalf. This consists of finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually developed with time. These business remain upgraded with the most recent changes and make sure that your filings adhere to the most existing standards. If the IRS requests extra information or performs an audit related to your ERC claim, they can also offer continuous support.
It is essential to research study and veterinarian any company offering ERC filing assistance to ensure their reliability and competence. Look for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who provide ERC submitting assistance.
Bear in mind that while these companies can offer important support, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies must meet one of two criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As discussed previously, for 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of certified earnings paid to employees, consisting of certain health insurance costs. 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: At first, companies that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. The very same incomes can not be used to claim 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 companies to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually developed over time. The best strategy is to speak with a tax professional or go to the official internal revenue service site for the most current and in-depth information regarding the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a company needs to fulfill among the following criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the 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.
The ERC is available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and companies that got a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC involves finishing the necessary forms and consisting of the credit on your employment tax return (usually Type 941). The exact time it requires to process the credit can vary based on several factors, consisting of the intricacy of your business and the workload of the internal revenue service. It’s advised to talk to a tax expert for guidance particular to your situation.
There are several companies that can help with the procedure of declaring the ERC. Some well-known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based on basic knowledge and may not reflect the most current updates or changes to the ERC. It is very important to talk to a tax professional or go to the official internal revenue service site for the most current and precise details regarding eligibility, claiming treatments, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on wages paid to all workers whether they actually worked or not. To put it simply, even if the.
staff members worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however likewise a part of the cost of employer.
supplied health care. Employee Retention Credit 2021 Guidance
Employers can be instantly repaid for the credit by lowering the quantity of payroll taxes they.