Lets talk first about Employee Retention Credit And Affiliation Rules :
Our group here what do these people doing everybody in this space is assisting teach people about ERC and uh always supply a beautiful breakfast and have individuals actually discover the program we ought to head to the room where we have the ability to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I mean you understand if you simply 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 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 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 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 understand the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact get the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their bank account and they can really rely on Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require 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 really essential today the staff member retention credit which the majority of you have actually never become aware of I definitely hadn’t heard of it till very just recently and discovered a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I have actually 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 not easy this isn’t like PPP we simply phone your bank manager and say give 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’ve become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to learn everything 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 organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund alright go on sorry I simply have to make sure we got that point I suggest that’s a big distinction a loan versus cash money I like money 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get real cash from the IRS all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that individual needed to be a worker 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 workers right you needed to have actually owned a service however it’s based on you having W-2 employees 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 correct so there were 6 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 2 and 3 of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part cash 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 worker’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the mayhem 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 five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caveat here the PPP money would need to be minimized 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 cash 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 employees 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 huge question is why does no one learn about this due to the fact that look when I initially became aware of this when I initially fulfilled Josh you understand I’ve got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I don’t believe it due to the fact that 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 been worthy of and we used them carefully to stay alive 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 contacted us to my political leader pals Guv Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one learn about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin because in the PPP loan process the federal government made it really 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was turmoil due to the fact that remember in the initial cares act you could not do 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 since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not truly he or she’s never 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 business your accountant no your accounting professional’s never done this prior to unless you have an account that went into this company and bottom line my firm Kevin has been in business because 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big big corporate clients have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, usually, basically than.
100 workers in 2019.
Companies that specialize in ERC filing assistance usually offer expertise and support to assist services navigate the complicated procedure of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit And Affiliation Rules
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. They can help figure out if you satisfy the requirements for the credit and recognize the optimum credit quantity you can declare.
Documentation and Calculation: ERC filing services will help in gathering the needed documentation, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit amount based on eligible salaries and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed types and documents in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have evolved in time. These business remain upgraded with the latest changes and ensure that your filings adhere to the most existing standards. They can also offer continuous support if the internal revenue service demands extra info or conducts an audit related to your ERC claim.
It’s important to research and veterinarian any business using ERC filing support to guarantee their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who use ERC filing support.
Remember that while these business can offer valuable help, it’s always an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage companies to retain and pay their employees during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, employers need to satisfy one of two requirements:.
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. As pointed out earlier, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified wages paid to staff members, including certain health plan expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. Nevertheless, the exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides a chance for organizations to change prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, normally Kind 941. The excess can be refunded to the employer if the credit surpasses the quantity of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have developed in time. The best course of action is to seek advice from a tax professional or check out the main internal revenue service site for the most in-depth and current details concerning the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a business must satisfy one of 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 invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and services that got a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC includes completing the required forms and including the credit on your work tax return (usually Form 941). The exact time it takes to process the credit can differ based on several aspects, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to seek advice from a tax professional for assistance specific to your circumstance.
There are numerous companies that can aid with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some popular business that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and get in touch with these companies straight to inquire about their services and costs.
Please note that the information provided here is based upon basic knowledge and may not show the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or go to the official IRS site for the most up-to-date and accurate details regarding eligibility, claiming procedures, and offered 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 employees whether they in fact worked or not. In other words, even if the.
workers worked full time and got paid 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 just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments but also a portion of the expense of company.
supplied healthcare. Employee Retention Credit And Affiliation Rules
Companies can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.