Lets talk first about Employee Retention Credit 4Th Quarter 2021 :
Our group here what do these men doing everybody in this space is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals actually find out about the program we need to head to the room where we have the ability to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I imply you understand if you simply begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I imply think of the number of actual 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 have the ability to track it you know when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has been completed and how many you think you’ve processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require 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 Terrific here you’re at my YouTube channel we’re speaking about something really crucial today the employee retention credit which the majority of you have actually never become aware of I definitely had not become aware of it till extremely just recently and learned a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call your bank supervisor and state offer 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 spokesperson for this I love this program it’s disappearing very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created 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 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 cash money payroll tax refund okay go on sorry I simply need to ensure we got that point I mean that’s a big distinction a loan versus money cash I like cash money that’s what we’re speaking about 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real cash from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s worker retention credit that individual had to be an employee 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 actually owned a service however it’s based on you having W-2 workers 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 eligible so you need 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 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the turmoil 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 up to 5 thousand Max and then 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 cash it is now there’s a caution here the PPP cash would have to be minimized 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 a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees 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 big concern is why does no one learn about this since look when I first became aware of this when I initially met Josh you understand I have actually got lots of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous lots of financial investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I do not think it since I utilize 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 used them sensibly to survive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my political leader good friends Guv Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no info 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 no one understand about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin since 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 huge 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 procedure procedure that’s all um and here there was turmoil due to the fact that keep in mind in the original cares act you might not do both programs so if you had actually done PPP you could 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 truly she or he’s never done it previously do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this business and bottom line my company Kevin has been in business given that 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 huge big corporate clients have actually worked with bottom line to recover other government programs we have actually 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 government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose service is completely or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether a company had, typically, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support usually supply knowledge and assistance to help companies navigate the complicated process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 4Th Quarter 2021
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based on aspects such as your market, revenue, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can declare, they can assist determine.
Documentation and Estimation: ERC filing services will help in collecting the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit quantity based on qualified earnings and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can review your previous payroll records and financials to identify potential chances for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the essential types and documentation in your place. This consists of completing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed gradually. These business stay upgraded with the latest modifications and make sure that your filings comply with the most existing guidelines. If the Internal revenue service demands extra information or performs an audit related to your ERC claim, they can also supply ongoing support.
It’s important to research and veterinarian any business offering ERC filing assistance to ensure their reliability and proficiency. Look for established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who offer ERC submitting assistance.
Keep in mind that while these companies can offer important help, it’s always a good idea to have a fundamental understanding of the ERC requirements and process 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. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage services to keep and pay their employees 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 companies, consisting of for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, companies need to fulfill one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a considerable decline is specified as a 20% decline 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 same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (up to 70%) of certified wages paid to workers, consisting of specific health plan 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: Initially, businesses that received an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. The exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, allowing qualified companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to change prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Kind 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have developed over time. The best course of action is to talk to a tax expert or go to the main internal revenue service site for the most detailed and up-to-date details relating to the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a business must fulfill one of the following criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. For example, federal government entities and companies that got a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC includes finishing the necessary kinds and consisting of the credit on your work income tax return (typically Form 941). The exact time it takes to process the credit can vary based on several aspects, consisting of the intricacy of your business and the workload of the internal revenue service. It’s suggested to talk to a tax expert for guidance specific to your scenario.
There are several business that can assist with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies directly to inquire about their services and costs.
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 essential to talk to a tax expert or visit the main internal revenue service site for the most current and accurate details concerning eligibility, claiming procedures, and readily available help.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on wages paid to all employees whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and got paid 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 wages paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not simply money payments but likewise a part of the cost of company.
provided health care. Employee Retention Credit 4Th Quarter 2021
Employers can be instantly compensated for the credit by lowering the amount of payroll taxes they.