Lets talk first about how to apply for employee retention credit in Greenwood for Deep Sea, Coastal, and Great Lakes Water Transportation …
Anytime if you have employees in between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank supervisor and say 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 representative for this I love this program it’s going away very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge 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 money payroll tax refund fine go on sorry I just need to make certain we got that point I indicate that’s a big difference a loan versus cash money I like money money that’s what we’re speaking 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 stunning difficult check in the mail where you get real money from the IRS all right so let’s discuss how it works since it seems 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 Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have owned a business but it’s based upon you having W-2 workers 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 qualified 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 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part cash just how much can you get back per employee 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 income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace 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 workers 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 no one know about this since look when I first became aware of this when I initially fulfilled Josh you know I’ve got lots of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of numerous financial investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t believe 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 and that were well deserved and we utilized them carefully to survive during 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 politician pals Governor Senators they didn’t understand about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody understand about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin since 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 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 just process procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you might not do both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never ever 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 before 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 accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has been in business given that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big corporate customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
Are you Eligible for Greenwood Deep Sea, Coastal, and Great Lakes Water Transportation ERC Find out now
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
company whose organization is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Availability.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance usually supply know-how and assistance to assist services navigate the complex procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 Worksheet Excel
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. They can help determine if you fulfill the requirements for the credit and recognize the optimum credit amount you can declare.
Documentation and Estimation: ERC filing services will assist 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 upon eligible incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the required types and documentation in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have evolved over time. These business remain updated with the current modifications and make sure that your filings comply with the most existing guidelines. If the IRS demands additional information or performs an audit associated to your ERC claim, they can also supply ongoing support.
It’s important to research and veterinarian any company offering ERC filing help to ensure their reliability and expertise. Search for established companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Remember that while these business can offer valuable support, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To qualify, employers must fulfill one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined 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.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of qualified wages paid to staff members, consisting of specific health insurance expenses. The optimum credit per employee 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 Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. However, the same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, permitting qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services 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 Form 941. The excess can be refunded to the employer if the credit exceeds the amount of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have actually evolved gradually. The very best strategy is to talk to a tax expert or visit the official IRS site for the most in-depth and updated information regarding the ERC, including any recent legal changes or updates.
To qualify for the ERC, a company should satisfy among the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. For example, government entities and companies that received a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC includes finishing the needed types and including the credit on your work 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 company and the workload of the IRS. It’s recommended to consult with a tax expert for assistance specific to your circumstance.
There are numerous companies that can assist with the procedure of claiming the ERC. Some well-known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.