Lets talk first about Employee Retention Credit After January 2022 :
Our team here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly provide a gorgeous breakfast and have people actually learn more about the program we must head to the room where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I indicate you understand if you simply start to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply think of how many real customers 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 validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything until they in fact get the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the process has actually been completed and how many you think you have actually processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you require specialists 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 Wonderful here you’re at my YouTube channel we’re discussing something actually crucial today the employee retention credit which the majority of you have actually never heard of I certainly had not heard of it till really just recently and found out a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 contact your bank manager and state offer 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’ve ended up being 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 employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund alright go on sorry I simply have to ensure we got that point I mean that’s a big distinction a loan versus money money I like money cash that’s what we’re discussing all right 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 lovely difficult check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s worker retention credit that individual had to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned a business but it’s based upon you having W-2 workers 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 very first six months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the six 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 measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the mayhem 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 up to 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money 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 cash you would still get a million dollar in the mail from the IRS so it’s huge certainly now the huge concern is why does nobody understand about this since appearance when I initially became aware of this when I first met Josh you understand I’ve got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many numerous financial investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I don’t think it since I utilize the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them wisely to stay alive throughout the pandemic so when I heard about this I said 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 understand about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the worker retention credit you understand what’s fascinating you’re discussing the banks Kevin because 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 nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was mayhem since remember in the initial cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered 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 ever made it clear to anyone about how to.
do this does your CFO know 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 don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this service and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big big corporate 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 property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Because of COVID-19 or whose gross invoices, company whose organization is totally or partially suspended.
decline by more than 50%.
Accessibility.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries 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 earnings differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing support generally provide proficiency and assistance to assist businesses browse the complicated procedure of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit After January 2022
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. They can assist identify if you fulfill the requirements for the credit and identify the optimum credit quantity you can claim.
Documentation and Computation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit quantity based on eligible salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the needed kinds and documentation on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have developed gradually. These business stay updated with the latest changes and make sure that your filings adhere to the most present standards. If the IRS demands additional details or conducts an audit associated to your ERC claim, they can also offer continuous support.
It’s important to research study and veterinarian any business providing ERC filing assistance to ensure their trustworthiness and expertise. Look for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who offer ERC submitting assistance.
Keep in mind that while these business can provide valuable help, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate companies to keep and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, employers need to meet one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As mentioned earlier, for 2021, a considerable decline is specified 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% decline in gross invoices compared to the exact 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 amounts to a percentage (as much as 70%) of qualified wages paid to employees, consisting of certain health plan 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: Initially, services that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they got a PPP loan. The exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, enabling eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for organizations to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be refunded to the employer if the credit exceeds the amount of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have developed over time. The best course of action is to speak with a tax professional or go to the main IRS site for the most current and in-depth info relating to the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, an organization must fulfill among the following 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. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and businesses that got a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes completing the required forms and including the credit on your employment income tax return (normally Form 941). The exact time it requires to process the credit can differ based upon a number of aspects, consisting of the complexity of your company and the work of the internal revenue service. It’s advised to speak with a tax professional for assistance particular to your scenario.
There are a number of business that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and get in touch with these companies directly to ask about their fees and services.
Please keep in mind that the details offered here is based on basic understanding and may not show the most recent updates or changes to the ERC. It is necessary to speak with a tax expert or check out the official IRS site for the most up-to-date and accurate info concerning eligibility, claiming treatments, and readily available support.
Less than 100. If the employer had 100 or less employees typically in 2019, then the credit is based.
on wages paid to all workers whether they actually worked or not. Simply put, even if the.
employees 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.
allowed only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments but likewise a part of the expense of employer.
supplied health care. Employee Retention Credit After January 2022
Payment.
Employers can be instantly reimbursed for the credit by decreasing the quantity of payroll taxes they.