Lets talk first about Employee Retention Credit Decision Tree :
Our team here what do these men doing everyone in this room is helping teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals actually discover the program we ought to head to the space where we have the ability 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 countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I imply you understand if you simply start to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I indicate think about how many actual clients 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they do not pay anything up until they actually get the money they do not pay bottom line Wonder trust anything till this letter is validated 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 been finished and the number of you think you have actually processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need 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 Fantastic here you’re at my YouTube channel we’re discussing something really essential today the staff member retention credit which the majority of you have never become aware of I certainly had not heard of it up until extremely just recently and found out a lot about it since this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just phone 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 us all about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund fine go on sorry I just need to make certain we got that point I indicate that’s a huge distinction a loan versus cash money I like cash money that’s what we’re talking about 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 initial cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be an employee so I’m going to make the Presumption 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 service however it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part money how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of cash it is now there’s a caution 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 decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big concern is why does nobody know about this due to the fact that look when I first became aware of this when I initially satisfied Josh you know I have actually got lots of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in business owners of which many suffered through the pandemic when I initially heard about this I called BS I do not believe it since I use 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 been worthy of and we used them carefully to stay alive 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 contacted us to my political leader good friends Guv Senators they didn’t know about it I indicate that’s how you understand that’s how false information is that there’s no info out there then a lot of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one learn about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it extremely 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 just procedure process that’s all um and here there was turmoil because remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they altered 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 anyone about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually been in business because 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big big business customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work opportunity 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 created to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose service is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’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 salaries paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing help typically provide knowledge and support to assist businesses navigate the intricate procedure of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Decision Tree
Eligibility Assessment: These companies will assess your service’s eligibility for the ERC based upon aspects such as your market, profits, and operations. They can assist identify if you meet the requirements for the credit and identify the maximum credit quantity you can declare.
Documentation and Calculation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and financial statements, to support your claim. They will also help calculate the credit amount based on qualified earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can examine your past payroll records and financials to identify prospective chances for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed forms and documentation on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved over time. These companies stay upgraded with the latest changes and make sure that your filings comply with the most present guidelines. They can also offer continuous support if the IRS requests additional details or conducts an audit related to your ERC claim.
It is essential to research and vet any business offering ERC filing assistance to ensure their reliability and competence. Try to find established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who use ERC submitting assistance.
Bear in mind that while these business can supply important help, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed 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 steps. The goal of the ERC is to motivate organizations to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, companies need to satisfy one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts 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 (approximately 70%) of qualified wages paid to employees, including certain health plan expenditures. 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, organizations that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. However, the exact same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, permitting eligible employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for organizations to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, typically Kind 941. If the credit goes beyond the amount of work taxes owed, the excess can be reimbursed to the company.
It is necessary to note that the ERC arrangements and eligibility criteria have actually evolved in time. The best course of action is to consult with a tax expert or visit the main IRS site for the most detailed and up-to-date information concerning the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a company needs to fulfill one of the following criteria:.
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 receipts. For 2021, a considerable decrease is defined as a 20% decrease 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 invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and services that got a PPP loan might have limitations on claiming the credit.
The process for declaring the ERC involves finishing the necessary kinds and including the credit on your employment tax return (generally Type 941). The exact time it requires to process the credit can vary based on several aspects, consisting of the intricacy of your company and the workload of the internal revenue service. It’s advised to consult with a tax professional for guidance specific to your situation.
There are numerous companies that can assist with the procedure of declaring the ERC. Some widely known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based on basic knowledge and might not reflect the most recent updates or changes to the ERC. It’s important to speak with a tax expert or go to the main IRS website for the most precise and up-to-date information regarding eligibility, declaring procedures, and offered help.
Less than 100. If the employer had 100 or fewer workers on average in 2019, then the credit is based.
on incomes paid to all employees whether they actually worked or not. In other words, even if the.
employees 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 workers on average in 2019.
enabled just for wages paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments but also a part of the expense of employer.
provided health care. Employee Retention Credit Decision Tree
Companies can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.