Lets talk first about how to apply for employee retention credit in Ontario for Curtain and Linen Mills …
Anytime if you have staff members in between 5 and five hundred so I’ve got the expert 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 not easy this isn’t like PPP we simply call your bank manager and say give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund okay go on sorry I simply need to make sure we got that point I imply that’s a huge distinction a loan versus money money I like money cash that’s what we’re talking 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 original 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 since it sounds like to me if it’s a if it’s staff member retention credit that individual had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned an organization however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and 3 of 2021. okay 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 just how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 as much as 5 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 five thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower 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 restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the big question is why does nobody understand about this due to the fact that look when I initially found out about this when I first met Josh you know I have actually got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which numerous 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 which were well been worthy of and we used them sensibly to survive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my political leader pals Guv Senators they didn’t know about it I imply that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s interesting you’re speaking 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 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 process procedure that’s all um and here there was chaos because keep in mind in the original cares act you could 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 refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not truly he or she’s never done it in the past 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 company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
Are you Eligible for Ontario Curtain and Linen Mills ERC Find out now
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
company whose organization is fully or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
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 before December 31, 2020.
The definition of certifying earnings differs by whether an employer had, usually, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support normally provide knowledge and assistance to assist organizations navigate the complicated process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Irs Employee Retention Credit Guidance
Eligibility Assessment: These companies will evaluate your service’s eligibility for the ERC based upon elements such as your industry, profits, and operations. They can help determine if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Paperwork and Computation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit quantity based on eligible salaries and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the needed kinds and documents on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have developed in time. These business stay upgraded with the current modifications and guarantee that your filings abide by the most present standards. If the IRS requests extra details or carries out an audit associated to your ERC claim, they can likewise supply ongoing assistance.
It is necessary to research and veterinarian any company using ERC filing assistance to ensure their credibility and competence. Try to find established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who offer ERC submitting assistance.
Remember that while these companies can provide important assistance, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions 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 objective of the ERC is to motivate companies to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, companies should meet one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As mentioned previously, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (as much as 70%) of qualified salaries paid to workers, including specific health insurance costs. The maximum 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 got an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. The exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, permitting qualified employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for organizations to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Type 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of work taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have actually evolved gradually. The very best course of action is to talk to a tax professional or visit the main IRS site for the most comprehensive and current details concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, a business must meet among the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt companies, however there are some exceptions. For instance, government entities and services that received a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC involves completing the necessary kinds and including the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can differ based upon several aspects, including the intricacy of your organization and the work of the IRS. It’s recommended to speak with a tax expert for guidance particular to your situation.
There are a number of business that can help with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies directly to ask about their charges and services.