Lets talk first about how to apply for employee retention credit in Alaska for EDUCATION / MUNICIPALITIES …
Anytime if you have staff members in between five and five hundred so I’ve got the specialist 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 not easy this isn’t like PPP we just phone your bank manager and say provide me a loan it doesn’t 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 representative for this I enjoy this program it’s going away soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with 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 practically everybody it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply have to make sure we got that point I mean that’s a big difference a loan versus cash cash I like money money that’s what we’re discussing all right 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 tough check in the mail where you get real money from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person had to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for employees right you needed to have actually owned a service but it’s based upon you having W-2 workers in America not 10.99. so 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 first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the turmoil of the pandemic so they wished 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 as much as five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop 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 because that’s a lot of money it is now there’s a caution here the PPP cash would need 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 on average Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred employees and you took PPP cash 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 learn about this due to the fact that appearance when I initially became aware of this when I first met Josh you understand I’ve got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I don’t think it because I use 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 utilized them carefully to survive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my politician pals 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 information out there then a lot of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that 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 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 simply process procedure that’s all um and here there was chaos because remember in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from 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 truly she or he’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 accountant no your accounting professional’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually been in business considering 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 business so a great deal of our big huge business customers have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
Are you Eligible for Alaska EDUCATION / MUNICIPALITIES ERC Find out now
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose organization is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether a company had, typically, more or less than.
100 workers in 2019.
Business that concentrate on ERC filing support typically provide knowledge and support to assist businesses navigate the complicated process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Innovation Refunds Erc
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based on elements such as your industry, revenue, and operations. If you meet the requirements for the credit and identify the optimum credit amount you can declare, they can assist figure out.
Documents and Estimation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial statements, to support your claim. They will also help compute the credit quantity based upon eligible earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the required forms and documentation on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved in time. These companies stay updated with the current modifications and guarantee that your filings comply with the most existing guidelines. If the Internal revenue service requests additional info or carries out an audit associated to your ERC claim, they can likewise offer continuous assistance.
It is essential to research study and vet any company offering ERC filing help to ensure their trustworthiness and competence. Search for established firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who use ERC submitting support.
Bear in mind that while these business can provide important assistance, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to retain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, employers must fulfill 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 receipts. As pointed out previously, 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 substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of certified salaries paid to staff members, 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: At first, companies that got an Income Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. The same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, normally Type 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the company.
It’s important to note that the ERC provisions and eligibility criteria have actually evolved in time. The best course of action is to seek advice from a tax expert or go to the official IRS website for the most detailed and updated information concerning the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, an organization should meet one of the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and businesses that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC includes finishing the required forms and consisting of the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon a number of factors, including the complexity of your company and the workload of the internal revenue service. It’s advised to speak with a tax professional for assistance particular to your situation.
There are several companies that can help with the process of declaring the ERC. Some widely known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.