Lets talk first about how to apply for employee retention credit in Billings for Scenic and Sightseeing Transportation, Water …
Anytime if you have staff members between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call up your bank supervisor and state offer me a loan it does not 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 have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund all right go on sorry I just have to make sure we got that point I indicate that’s a huge distinction a loan versus money money I like cash 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 initial cares Act is the ERC and yes Kevin it is a gorgeous tough check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that person needed to be an employee 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 employees right you had to have owned a company however it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members 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 need to be on payroll for the very first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you get back per worker 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 salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus since the turmoil 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 up to 5 thousand Max and after that what occurs 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 6 thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars an individual 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 big obviously now the big question is why does nobody know about this because appearance 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 supporter for entrepreneurship in America and make lots of numerous financial investments in business owners of which many suffered through the pandemic when I initially heard about this I called BS I do not think it since I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we utilized them sensibly to stay alive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was chaos because keep in mind in the original cares act you could refrain from doing 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 not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never done it in the past 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 accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this service and bottom line my firm Kevin has been in business given that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge huge business customers have dealt with bottom line to recover 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 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 motivate.
Are you Eligible for Billings Scenic and Sightseeing Transportation, Water ERC Find out now
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, company whose company is fully or partly suspended.
decline by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization 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.
company’s gross invoices go above 80% of an equivalent 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 wages paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance normally supply expertise and support to help companies navigate the complex procedure of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Qualified Wages Employee Retention Credit 2021
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist figure out if you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit quantity based on eligible incomes and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can examine your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the needed forms and documentation on your behalf. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have actually progressed gradually. These companies stay upgraded with the current changes and ensure that your filings abide by the most current standards. If the IRS demands additional info or performs an audit associated to your ERC claim, they can likewise offer ongoing assistance.
It’s important to research and veterinarian any company providing ERC filing support to ensure their credibility and competence. Look for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC filing support.
Bear in mind that while these companies can offer important support, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions 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 measures. The objective of the ERC is to motivate businesses to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, employers need to meet one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As pointed out earlier, 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 significant decrease 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.
Credit Quantity: 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 (approximately 70%) of qualified wages paid to employees, including certain 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: At first, 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 permits businesses to declare the ERC even if they received a PPP loan. Nevertheless, the very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Type 941. The excess can be refunded to the employer if the credit surpasses the amount of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility criteria have evolved in time. The best course of action is to consult with a tax expert or go to the official IRS website for the most updated and in-depth details relating to the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a business needs to fulfill among the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and services that received a PPP loan may have constraints on declaring the credit.
The procedure for claiming the ERC involves finishing the essential kinds and including the credit on your employment income tax return (generally Type 941). The exact time it takes to process the credit can differ based upon several factors, consisting of the complexity of your company and the work of the internal revenue service. It’s suggested to consult with a tax expert for assistance specific to your circumstance.
There are numerous business that can assist with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some popular companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these business directly to ask about their services and fees.