Lets talk first about Do Tips Count As Wages For Employee Retention Credit :
Our group here what do these men doing everyone in this space is helping teach people about ERC and uh always offer a gorgeous breakfast and have individuals really discover the program we ought to head to the room where we are able to display a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I suggest you understand if you just begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean think about the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified 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 understand when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything until they really receive the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their savings account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you believe you have actually processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you need professionals on the other end of the phone to process this and get it to where you get among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something actually essential today the worker retention credit which most of you have never heard of I definitely hadn’t become aware of it until really just recently and found out a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 simply call your bank manager and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund fine go on sorry I simply need to make sure we got that point I indicate that’s a big distinction a loan versus cash 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 initial cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you needed to have owned a service however it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members 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 very first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part money just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the turmoil 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 after that what happens 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 staff member that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars a person 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 learn about this due to the fact that appearance when I initially found out about this when I first satisfied Josh you understand I have actually got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I do not think it since I utilize the PPP we went through the money center Banks to get it it was really 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 throughout the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t know about it I indicate that’s how you know that’s how false information is that there’s no info out there then a bunch 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 nobody understand about the staff member retention credit you know what’s interesting you’re discussing the banks Kevin because in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process process 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 initial cares act you could not do both programs so if you had done PPP you could not do ERC in the initial 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 government never ever made it clear to any person about how to.
do this does your CFO know how to do this not truly he or she’s never done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve 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 huge huge corporate clients have actually worked with bottom line to recuperate other federal 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 employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, company whose service is totally or partly suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all employers no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance normally provide proficiency and support to assist companies browse the complex process of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Do Tips Count As Wages For Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can claim, they can help identify.
Paperwork and Calculation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based upon qualified wages and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the essential types and documentation in your place. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually developed in time. These business stay updated with the current modifications and guarantee that your filings comply with the most present standards. They can also provide continuous assistance if the internal revenue service requests extra information or performs an audit related to your ERC claim.
It’s important to research and vet any company providing ERC filing assistance to guarantee their trustworthiness and competence. Look for established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who offer ERC submitting assistance.
Keep in mind that while these business can offer important help, it’s always a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate organizations to keep and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, companies should meet one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. 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 considerable decrease 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.
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 earnings paid to employees, including certain health insurance expenses. The maximum credit per employee 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 Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The 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 boosted, permitting eligible employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, normally Kind 941. The excess can be refunded to the company if the credit goes beyond the quantity of employment taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility requirements have progressed gradually. The best strategy is to seek advice from a tax professional or check out the main IRS website for the most in-depth and current information relating to the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a service needs to satisfy one of the following 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 invoices. 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% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and services that received a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC involves completing the essential forms and including the credit on your employment income tax return (usually Form 941). The exact time it requires to process the credit can differ based upon a number of elements, including the complexity of your business and the workload of the IRS. It’s suggested to seek advice from a tax expert for assistance specific to your situation.
There are several companies that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some popular companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these companies directly to inquire about their services and costs.
Please keep in mind that the details provided here is based upon general understanding and might not show the most recent updates or changes to the ERC. It’s important to speak with a tax expert or visit the official IRS website for the most accurate and current details regarding eligibility, declaring procedures, and offered help.
Less than 100. If the employer had 100 or less staff members on average in 2019, then the credit is based.
on wages paid to all workers whether they really worked or not. In other words, even if the.
staff members worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted only for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments however likewise a part of the expense of company.
supplied healthcare. Do Tips Count As Wages For Employee Retention Credit
Payment.
Companies can be right away repaid for the credit by lowering the quantity of payroll taxes they.