Lets talk first about Employee Retention Credit 2017 Refundable :
Our group here what do these men doing everyone in this room is assisting teach people about ERC and uh constantly supply a gorgeous breakfast and have individuals really learn more about the program we should head to the space where we have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I suggest you understand if you just start to take a 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 imply think of how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything till they actually receive the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their checking account and they can genuinely rely on Wonder trust that the procedure has been finished and how many you believe you have actually processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you require specialists 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 Fantastic here you’re at my YouTube channel we’re talking about something truly crucial today the employee retention credit which most of you have never ever become aware of I definitely had not become aware of it until extremely recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I have actually got the professional 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 not easy this isn’t like PPP we just call your bank supervisor and state give me a loan it does not 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 like this program it’s disappearing soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I just need to make certain we got that point I mean that’s a big difference a loan versus cash cash I like cash cash that’s what we’re talking about okay 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 beautiful hard check in the mail where you get actual cash from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s staff member retention credit that person had to be a staff member so I’m going to make the Presumption 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 business but it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 workers 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 need to be on payroll for the very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured 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 employee 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 wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus due to the fact that 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 approximately 5 thousand Max and then 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of money it is now there’s a caution here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around ten 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 staff members and you took PPP money 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 learn about this due to the fact that appearance when I first became aware of this when I initially met Josh you know I have actually got lots of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t believe it because I utilize 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 used them carefully to survive during the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my political leader pals Governor Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it due to the fact that 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 intriguing you’re discussing the banks Kevin since in the PPP loan process the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was turmoil due to the fact that remember in the original cares act you could not do both programs so if you had actually 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 since 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 know how to do this not really she or he’s never ever done it previously 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 accounting professional no your accountant’s never done this before unless you have an account that went into this service and bottom line my company Kevin has stayed in business because 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big big corporate customers have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is completely or partially suspended.
decrease by more than 50%.
Accessibility.
1. The credit is offered to all companies regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. When the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of certifying wages varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support normally supply proficiency and support to assist businesses navigate the complex process of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2017 Refundable
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you meet the requirements for the credit and identify the optimum credit amount you can declare, they can assist figure out.
Paperwork and Estimation: ERC filing services will help in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can review your previous payroll records and financials to determine potential chances for retroactive credits. They can help you change prior income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential types and documentation on your behalf. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have actually evolved in time. These companies remain updated with the latest modifications and ensure that your filings adhere to the most existing guidelines. If the IRS demands extra information or carries out an audit related to your ERC claim, they can likewise supply ongoing support.
It is very important to research and vet any business providing ERC filing assistance to guarantee their reliability and know-how. Search for established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who provide ERC submitting support.
Remember that while these companies can supply valuable support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to keep and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To certify, employers must meet one of two criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As pointed out previously, for 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices 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 is equal to a percentage (approximately 70%) of qualified incomes paid to workers, including specific health insurance expenditures. 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: At first, organizations that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, permitting eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually progressed with time. The very best strategy is to consult with a tax professional or check out the main internal revenue service site for the most comprehensive and current info relating to the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, an organization should satisfy among the following requirements:.
The business operations were fully or partly 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% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that got a PPP loan may have limitations on claiming the credit.
The process for declaring the ERC involves finishing the needed kinds and including the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can differ based upon a number of aspects, including the complexity of your service and the workload of the internal revenue service. It’s advised to seek advice from a tax expert for guidance particular to your situation.
There are numerous business that can assist with the process of claiming the ERC. Some well-known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon general understanding and may not reflect the most current updates or changes to the ERC. It is very important to seek advice from a tax professional or check out the official internal revenue service site for the most current and precise information regarding eligibility, claiming procedures, and available assistance.
Less than 100. If the company had 100 or less staff members usually in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. To put it simply, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees typically in 2019, then the credit is.
permitted just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not simply money payments however also a part of the expense of employer.
provided healthcare. Employee Retention Credit 2017 Refundable
Payment.
Companies can be instantly compensated for the credit by lowering the quantity of payroll taxes they.