Lets talk first about how to apply for employee retention credit in Maine for LOGISTICS …
Anytime if you have staff members between 5 and five hundred so I have actually got the professional 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 just call 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’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very 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 begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I simply need to make sure we got that point I indicate that’s a big distinction a loan versus cash money I like money cash that’s what we’re discussing alright 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 hard check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that person needed to be an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you had to have actually owned a company however it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 employees 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 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 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 throughout that duration now let’s talk my favorite part cash how much can you return 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 income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the chaos 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 as much as 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 lot of money it is now there’s a caution here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say 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 internal revenue service so it’s big undoubtedly now the big concern is why does no one learn about this because look when I initially heard about this when I initially satisfied Josh you understand I have actually got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many many investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it because 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 and that were well deserved and we used them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it extremely 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 procedure 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 mayhem due to the fact that remember in the initial cares act you could 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 not doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it before 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 done this before unless you have an account that entered into this organization and bottom line my company Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big big business clients have dealt with bottom line to recuperate 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 federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
Are you Eligible for Maine LOGISTICS ERC Find out now
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose service is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Accessibility.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by 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. When the.
employer’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 qualifying incomes paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether a company had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing support typically supply knowledge and assistance to assist organizations browse the intricate process of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Innovation Refunds Account Executive Salary
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. If you fulfill the requirements for the credit and determine the optimum credit quantity you can claim, they can help identify.
Documentation and Computation: ERC filing services will help in gathering the necessary paperwork, such as payroll records and financial statements, to support your claim. They will also assist compute the credit amount based upon eligible salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to identify prospective chances for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the required kinds and documentation on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have evolved gradually. These companies remain updated with the most recent changes and guarantee that your filings abide by the most existing guidelines. They can likewise provide ongoing support if the internal revenue service demands extra information or performs an audit related to your ERC claim.
It is very important to research and vet any business providing ERC filing support to ensure their trustworthiness and competence. Try to find recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who offer ERC filing support.
Keep in mind that while these companies can supply valuable help, it’s always a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate businesses to keep and pay their employees during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies need to satisfy one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (up to 70%) of certified salaries paid to workers, consisting of certain health insurance expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. However, the exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, enabling qualified employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, usually Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is necessary to note that the ERC provisions and eligibility requirements have evolved over time. The very best course of action is to speak with a tax expert or visit the main IRS site for the most detailed and current details regarding the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, an organization must fulfill one of the following criteria:.
The 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 specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and businesses that got a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC includes completing the needed forms and consisting of the credit on your employment income tax return (usually Form 941). The exact time it takes to process the credit can vary based on several elements, including the intricacy of your company and the work of the IRS. It’s suggested to talk to a tax expert for assistance particular to your situation.
There are numerous business that can aid with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some well-known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these business straight to inquire about their costs and services.