Lets talk first about Claiming The Employee Retention Credit :
Our group here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have individuals truly find out about the program we must head to the space where we have the ability to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I indicate you understand if you just begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I mean consider the number of actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything till they in fact get the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their checking account and they can truly trust Wonder trust that the process has been ended up and the number of you believe you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need you require experts on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re speaking about something actually crucial today the worker retention credit which the majority of you have actually never ever become aware of I certainly hadn’t become aware of it until really recently and learned a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just phone your bank supervisor and say 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 have actually become yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered organizations 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 big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund alright go on sorry I just have to ensure we got that point I mean that’s a big distinction a loan versus cash cash I like cash money that’s what we’re talking about 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 beautiful tough check in the mail where you get actual cash from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s employee retention credit that person needed 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 investors it’s for staff members right you had to have owned a service but 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 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 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 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 preferred part money how much can you return per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the turmoil of the pandemic so they wanted to even get more to keep those staff members 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 happens 21 000 Max in 2021 oh that’s how you come up with twenty six 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 caveat here the PPP cash would need to be decreased 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 money somewhere around ten thousand dollars an individual so let’s say 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 clearly now the huge question is why does nobody know about this due to the fact that appearance when I first became aware of this when I initially met Josh you understand I have actually got lots of investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since 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 and that were well should have and we used them sensibly to survive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even called to my politician pals Governor Senators they didn’t understand about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin since in the PPP loan process 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 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 turmoil since keep in mind in the initial cares act you might refrain from doing both programs so if you had actually done PPP you might not do 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 government never made it clear to anybody about how to.
do this does your CFO know how to do this not really she or he’s never done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this before unless you have an account that entered into this organization and bottom line my company Kevin has actually stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge business clients have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose business is completely or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company 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 listed below 50% of the similar quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether an employer had, on average, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support typically provide competence and assistance to help companies navigate the complicated process of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Claiming The Employee Retention Credit
Eligibility Evaluation: These business will assess your service’s eligibility for the ERC based on aspects such as your market, profits, and operations. They can help figure out if you fulfill the requirements for the credit and identify the maximum credit quantity you can declare.
Documentation and Estimation: ERC filing services will assist in collecting the essential documentation, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit amount based on qualified incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can review your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you modify previous income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the necessary kinds and documentation in your place. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have developed gradually. These companies remain updated with the latest modifications and make sure that your filings adhere to the most present standards. They can also provide ongoing assistance if the IRS demands additional details or conducts an audit related to your ERC claim.
It’s important to research and vet any business offering ERC filing help to ensure their reliability and expertise. Look for recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who provide ERC filing support.
Bear in mind that while these companies can supply important assistance, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage companies to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, employers must meet one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. As discussed previously, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined 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 right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (as much as 70%) of qualified salaries paid to workers, including particular health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. The same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, permitting qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, normally Type 941. The excess can be refunded to the employer if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have evolved in time. The best strategy is to speak with a tax expert or go to the official internal revenue service website for the most comprehensive and current information concerning the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, an organization should satisfy one of the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact 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% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and companies that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC includes completing the necessary types and including the credit on your employment income tax return (usually Type 941). The exact time it takes to process the credit can differ based on numerous elements, consisting of the intricacy of your company and the workload of the IRS. It’s advised to seek advice from a tax expert for assistance particular to your circumstance.
There are a number of companies that can aid with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some popular companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these companies straight to inquire about their services and fees.
Please note that the information offered here is based upon general understanding and might not show the most current updates or modifications to the ERC. It’s important to seek advice from a tax professional or go to the official internal revenue service site for the most precise and current information regarding eligibility, declaring treatments, and readily available help.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on wages paid to all employees whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments but also a portion of the cost of employer.
offered healthcare. Claiming The Employee Retention Credit
Employers can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.