Lets talk first about Employee Retention Credit Deduction :
Our group here what do these people doing everybody in this room is helping teach people about ERC and uh always supply a lovely breakfast and have individuals truly find out about the program we ought to head to the room where we are able to display some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I imply you know if you simply start to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I suggest consider 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 validated the numbers are confirmed 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 know when you
get this you understand the check is gone for sure which’s when they pay so they do not pay anything up until they really get the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the procedure has actually been ended up and the number of you think you’ve processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the employee retention credit which the majority of you have actually never ever become aware of I certainly hadn’t heard of it until extremely recently and learned a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between 5 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 phone your bank manager 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’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I simply have to make certain we got that point I imply that’s a big difference a loan versus money money I like cash money that’s what we’re speaking about alright 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 hard check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member retention credit that person needed 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 investors it’s for staff members right you needed to have actually owned an organization however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 staff members 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 first six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part cash 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 specific Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that happen um they simply 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 workers 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 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 6 thousand dollars per staff member that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace 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 employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big clearly now the huge question is why does no one know about this because appearance when I initially found out about this when I first met Josh you understand I have actually got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make many numerous financial investments in business owners of which many suffered through the pandemic when I initially heard about this I called BS I do not think it since I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them sensibly 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 called to my political leader good friends Governor Senators they didn’t learn about it I indicate that’s how you understand that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin because in the PPP loan process the federal government made it extremely clear that if you wanted 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 mayhem since keep in mind in the original cares act you might not do both programs so if you had actually done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has been in business because 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member 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 up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, company whose organization is totally or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partly 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. When the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages 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 earnings differs by whether an employer had, typically, basically than.
100 workers in 2019.
Companies that focus on ERC filing help generally provide know-how and assistance to assist businesses browse the complicated process of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Deduction
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based on aspects such as your industry, income, and operations. If you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim, they can assist determine.
Documents and Calculation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based on eligible incomes and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary forms and paperwork in your place. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually developed with time. These companies remain updated with the latest modifications and make sure that your filings adhere to the most present guidelines. They can also supply continuous assistance if the IRS requests additional info or carries out an audit related to your ERC claim.
It is very important to research and vet any company providing ERC filing support to ensure their reliability and proficiency. Try to find recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax professionals who use ERC filing assistance.
Remember that while these business can provide valuable support, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee 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 goal of the ERC is to encourage businesses to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers must satisfy one of two requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out earlier, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of qualified earnings paid to workers, consisting of certain 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: Initially, businesses that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. The very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing qualified employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Kind 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC provisions and eligibility requirements have actually evolved gradually. The very best strategy is to seek advice from a tax professional or check out the main IRS site for the most detailed and current info concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, an organization must satisfy one of the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and companies that got a PPP loan might have constraints on claiming the credit.
The process for declaring the ERC includes completing the needed kinds and including the credit on your work income tax return (typically Form 941). The exact time it takes to process the credit can differ based on several aspects, consisting of the intricacy of your service and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your situation.
There are several companies that can help with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these companies straight to ask about their costs and services.
Please note that the details provided here is based on basic understanding and may not reflect the most recent updates or changes to the ERC. It is necessary to consult with a tax professional or visit the main internal revenue service site for the most accurate and updated details relating to eligibility, declaring procedures, and available assistance.
Less than 100. If the employer had 100 or fewer staff members on average in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
employees worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
enabled only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a portion of the expense of employer.
offered healthcare. Employee Retention Credit Deduction
Companies can be immediately compensated for the credit by minimizing the amount of payroll taxes they.