Lets talk first about Employee Retention Credit For Employers Affected By Qualified Disasters :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always supply a stunning breakfast and have people really learn about the program we ought to head to the room where we have the ability 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 countless dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I imply you understand if you simply start 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 suggest it’s just I suggest think of the number of real customers 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything until they in fact receive the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has been ended up and how many you think you’ve processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you require experts 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 Wonderful here you’re at my YouTube channel we’re talking about something actually essential today the staff member retention credit which the majority of you have actually never become aware of I definitely hadn’t become aware of it till extremely just recently and learned a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I have actually got the expert 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 difficult this isn’t like PPP we simply call up your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used 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.
fix the money money payroll tax refund fine go on sorry I just have to ensure we got that point I imply that’s a huge difference a loan versus cash money I like cash cash that’s what we’re speaking 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 lovely tough check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have owned a service however it’s based upon you having W-2 staff members 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 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 four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you have to be on the W-2 during that duration 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 six quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wished 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 up to five thousand Max and after that what happens 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 employee that is because that’s a great deal of money it is now there’s a caution here the PPP money would have to be lowered 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 typically Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say 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 money you would still get a million dollar in the mail from the internal revenue service so it’s big certainly now the big concern is why does no one know about this due to the fact that look when I initially heard about this when I first satisfied Josh you know I have actually got great deals of investments in lots of business I’m a major advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I don’t think 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 should have and we used them carefully to survive during the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my politician good friends Guv Senators they didn’t learn about it I mean 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 because you took the PPP likewise not real so let’s ask Josh why does no one learn about the employee retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure 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 process process that’s all um and here there was mayhem due to the fact that keep in mind in the original cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC because 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 understand how to do this not actually she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll companies 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 company Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our big huge business customers have actually worked with bottom line to recover 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 real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers despite size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are computed 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 company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether a company had, usually, basically than.
100 employees in 2019.
Companies that focus on ERC filing assistance usually provide know-how and support to help businesses navigate the complex process of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit For Employers Affected By Qualified Disasters
Eligibility Assessment: These business will assess your company’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can claim, they can assist determine.
Documentation and Calculation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit amount based on eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the essential forms and documents on your behalf. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved in time. These business stay updated with the latest modifications and guarantee that your filings abide by the most current standards. They can also provide ongoing assistance if the IRS demands extra info or performs an audit related to your ERC claim.
It’s important to research study and veterinarian any company providing ERC filing assistance to guarantee their credibility and competence. Search for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who offer ERC filing assistance.
Remember that while these companies can provide important support, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate organizations to keep and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies should fulfill one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As pointed out earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts 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 employer’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of qualified wages paid to employees, including certain health insurance costs. The optimum credit per worker 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. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. The same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, enabling qualified companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for services to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work 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 note that the ERC provisions and eligibility requirements have developed in time. The best course of action is to consult with a tax expert or check out the main IRS website for the most updated and in-depth information relating to the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a business needs to satisfy one of the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and businesses that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC involves completing the essential kinds and consisting of the credit on your work tax return (normally Type 941). The exact time it requires to process the credit can vary based upon several aspects, consisting of the complexity of your organization and the work of the IRS. It’s suggested to speak with a tax expert for assistance particular to your scenario.
There are several business that can assist with the process of declaring the ERC. Some widely known companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based on general knowledge and might not reflect the most recent updates or modifications to the ERC. It is necessary to talk to a tax expert or check out the official internal revenue service website for the most accurate and updated details relating to eligibility, claiming procedures, and readily available help.
Less than 100. If the employer had 100 or less workers on average in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. In other words, even if the.
staff members worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
enabled just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not simply money payments however also a portion of the expense of employer.
provided healthcare. Employee Retention Credit For Employers Affected By Qualified Disasters
Employers can be right away repaid for the credit by decreasing the quantity of payroll taxes they.