Lets talk first about how to apply for employee retention credit in Guilford for Sawmills and Wood Preservation …
Anytime if you have staff members in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank manager and say provide 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 like this program it’s disappearing very 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 created the cares Act and the cares act provided organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund fine go on sorry I just need to ensure 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 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real money 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 individual needed to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned a business however it’s based on you having W-2 employees 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 need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 appropriate so there were six 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 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the calculation 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 employee’s wage to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because 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 develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be decreased from the twenty 6 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 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the big question is why does no one understand about this because look when I first found out about this when I first fulfilled Josh you understand I have actually got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I do not believe it since I utilize 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 used them carefully to survive during the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even called to my political leader pals Governor Senators they didn’t know 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 people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one understand about the employee retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan process 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 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 turmoil due to the fact that keep in mind in the original cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never ever 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 business your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this company and bottom line my company Kevin has been in business since 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge business customers have actually worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness 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 designed to encourage.
Are you Eligible for Guilford Sawmills and Wood Preservation ERC Find out now
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, employer whose company is totally or partly suspended.
decline by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar 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 certifying incomes paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether a company had, usually, basically than.
100 workers in 2019.
Business that concentrate on ERC filing assistance typically provide expertise and assistance to assist businesses browse the complicated procedure of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Are Tips Considered Wages For Employee Retention Credit
Eligibility Assessment: These business will assess your company’s eligibility for the ERC based on factors such as your industry, earnings, and operations. If you fulfill the requirements for the credit and determine the optimum credit quantity you can claim, they can assist identify.
Documentation and Calculation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial declarations, to support your claim. They will also help compute the credit amount based upon eligible earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify potential chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the needed kinds and documentation on your behalf. This includes finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved gradually. These companies stay upgraded with the most recent changes and make sure that your filings comply with the most current standards. They can also offer continuous assistance if the internal revenue service requests additional details or performs an audit related to your ERC claim.
It is essential to research study and vet any business providing ERC filing assistance to ensure their reliability and expertise. Search for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who offer ERC submitting assistance.
Bear in mind that while these companies can supply valuable help, it’s constantly a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure precise 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 services to maintain and pay their workers 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 employers, consisting of for-profit companies, tax-exempt companies, and certain governmental entities. To certify, employers must meet one of two criteria:.
The business operations were totally or partially 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 specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline 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 employer’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified earnings paid to workers, consisting of particular health plan expenditures. 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, organizations that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they received a PPP loan. The very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting qualified companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Type 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have evolved in time. The best strategy is to talk to a tax professional or check out the official internal revenue service website for the most current and comprehensive details relating to the ERC, including any recent legislative changes or updates.
To receive the ERC, a business should fulfill one of the following criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the required forms and consisting of the credit on your work income tax return (typically Form 941). The exact time it takes to process the credit can vary based upon numerous elements, consisting of the intricacy of your organization and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your circumstance.
There are several business that can assist with the procedure of declaring the ERC. Some popular companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.