Employee Retention Credit for Ice Cream and Frozen Dessert Manufacturing in Santa Barbara 2023 – How to Apply FAQ

Lets talk first about how to apply for employee retention credit in Santa Barbara for Ice Cream and Frozen Dessert Manufacturing …

Anytime if you have staff members in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call up your bank supervisor and say offer me a loan it doesn’t 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 have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses three 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 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 indicate that’s a big difference a loan versus money money I like cash cash that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it sounds like to me if it’s a if it’s employee retention credit that person had to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have owned a business however it’s based on you having W-2 employees 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 eligible 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 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part cash just how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.

2021 versus because the chaos 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 up to five thousand Max and after that 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 worker that is because that’s a great deal of money it is now there’s a caveat here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash 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 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 obviously now the huge concern is why does nobody understand about this because look when I initially became aware of this when I first met Josh you know I have actually got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think it because 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 wisely to stay alive 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 buddies Governor Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 simply procedure procedure that’s all um and here there was chaos since remember in the original cares act you might refrain from doing both programs so if you had 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 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 any person about how to.

do this does your CFO know how to do this not truly she or he’s never ever 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 business your accountant no your accountant’s never ever done this before unless you have an account that went into this business and bottom line my firm Kevin has been in business since 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate clients have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.

The employee retention tax credit is a broad based refundable tax credit created to motivate.

 

Are you Eligible for Santa Barbara Ice Cream and Frozen Dessert Manufacturing ERC Find out now

employers to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose company is fully or partly suspended.
decrease by more than 50%.
Schedule.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies 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 employer’s service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.

Estimation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying wages differs by whether a company had, usually, basically than.
100 workers in 2019.

Business that focus on ERC filing help generally supply know-how and support to help services navigate the complicated process of claiming the credit. They can provide various services, consisting of:.

 

How is the employee retention credit calculated? What Is An Eligible Employer For Employee Retention Credit

Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based on elements such as your industry, earnings, and operations. They can help identify if you meet the requirements for the credit and identify the optimum credit quantity you can declare.
Documentation and Estimation: ERC filing services will assist in collecting the required documents, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit quantity based on qualified incomes and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your past payroll records and financials to determine potential opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the needed forms and documents on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have actually evolved gradually. These business remain upgraded with the current modifications and make sure that your filings adhere to the most present standards. If the Internal revenue service requests extra info or conducts an audit associated to your ERC claim, they can also offer continuous assistance.
It’s important to research and veterinarian any company offering ERC filing support to ensure their reliability and know-how. Look for established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who use ERC submitting assistance.

Bear in mind that while these business can offer valuable support, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure accurate filings.

The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage organizations to keep and pay their workers during the pandemic, even if their operations have actually been impacted.

Here are some bottom lines about the ERC:.

Eligibility: The ERC is offered to qualified employers, including for-profit services, tax-exempt companies, and particular governmental entities. To qualify, employers need to meet one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As pointed out earlier, for 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices 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 amount amounts to a portion (approximately 70%) of certified incomes paid to workers, 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: At first, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. The exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Form 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have actually evolved in time. The very best course of action is to seek advice from a tax professional or go to the main IRS website for the most updated and detailed details regarding the ERC, including any current legislative modifications or updates.

To get approved for the ERC, a business should satisfy one of the following criteria:.

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 invoices. For 2021, a substantial 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% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and companies that received a PPP loan might have limitations on claiming the credit.

The procedure for declaring the ERC involves completing the necessary forms and including the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can vary based upon several aspects, including the complexity of your organization and the workload of the internal revenue service. It’s recommended to seek advice from a tax professional for guidance specific to your scenario.

There are a number of companies that can help with the procedure of declaring the ERC. Some popular business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.