Lets talk first about how to apply for employee retention credit in Framingham for Sporting Goods, Hobby, Musical Instrument, and Book Stores …
Anytime if you have employees in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank supervisor and say provide me a loan it does not work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies 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 big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I simply need to make certain we got that point I mean that’s a big difference a loan versus money money I like cash money that’s what we’re talking about fine 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 difficult check in the mail where you get real money from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have actually owned a company 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 6 months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part money just how much can you get back per staff member 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 a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum 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 workers 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 after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of money it is now there’s a caution here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around ten 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 staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big certainly now the big concern is why does nobody know about this since look when I first became aware of this when I first met Josh you understand I’ve got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe it due to the fact that I use 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 should have and we utilized them wisely to survive throughout the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even contacted us to my politician pals Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you know what’s interesting you’re talking about the banks Kevin since 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 just procedure process that’s all um and here there was turmoil 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 might refrain from doing ERC in the original program and when they changed 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 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 don’t do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that went into this business and bottom line my firm Kevin has stayed in business since 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 great deal of our huge big corporate customers have actually worked with bottom line to recover other 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 employee retention tax credit is a broad based refundable tax credit created to motivate.
Are you Eligible for Framingham Sporting Goods, Hobby, Musical Instrument, and Book Stores ERC Find out now
companies to keep staff members on their payroll. The credit is 50% of as much as $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 regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing assistance generally provide expertise and assistance to help services navigate the complex procedure of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Ppp And Employee Retention Credit
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based upon elements such as your market, earnings, and operations. They can help identify if you meet the requirements for the credit and identify the optimum credit amount you can declare.
Paperwork and Estimation: ERC filing services will help in collecting the essential documents, such as payroll records and financial declarations, 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 companies can evaluate your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the essential kinds and documents on your behalf. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed in time. These business remain upgraded with the most recent modifications and guarantee that your filings comply with the most current guidelines. If the Internal revenue service demands extra details or carries out an audit related to your ERC claim, they can likewise offer continuous assistance.
It is very important to research and veterinarian any company using ERC filing support to guarantee their reliability and proficiency. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who use ERC filing support.
Keep in mind that while these companies can provide important support, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and make sure 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 steps. The objective of the ERC is to motivate businesses to retain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies need to satisfy one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned 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 substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease 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 amount is equal to a portion (approximately 70%) of certified salaries paid to staff members, consisting of particular health plan 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: At first, 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 companies to claim the ERC even if they received a PPP loan. The same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, permitting qualified employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for businesses to modify prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Type 941. The excess can be refunded to the company if the credit exceeds the amount of employment taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed with time. The very best course of action is to talk to a tax professional or check out the official IRS website for the most comprehensive and current info concerning the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a company must meet one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined 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 right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and services that got a PPP loan may have restrictions on declaring the credit.
The process for claiming the ERC includes finishing the required kinds and including the credit on your employment income tax return (normally Form 941). The exact time it requires to process the credit can vary based upon several aspects, consisting of the intricacy of your business 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 several companies that can assist with the process of claiming the ERC. Some well-known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.