Lets talk first about Employee Retention Credit For Working Through Covid :
Our team here what do these people doing everybody in this room is helping teach people about ERC and uh always offer a lovely breakfast and have individuals actually learn about the program we ought to head to the space where we are able 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 hundreds of countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I imply you know 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 indicate it’s simply I imply think about the number of 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 IRS heading to the client so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they do not pay anything until they actually receive the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their bank account and they can truly trust Wonder trust that the procedure has actually been completed and the number of you think you’ve processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you need you require experts 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 talking about something actually important today the worker retention credit which most of you have actually never ever heard of I definitely had not heard of it until very just recently and found out a lot about it because this is probably the most affordable expense 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 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 simply call up your bank manager and state offer me a loan it doesn’t 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 spokesperson for this I like this program it’s disappearing very soon you got to find out everything 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 came up with the cares Act and the cares act provided businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I simply have to make certain we got that point I suggest that’s a huge distinction a loan versus cash money I like cash money that’s what we’re speaking about fine 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 beautiful hard check in the mail where you get real cash from the IRS all right so let’s talk about 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 an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for employees right you had to have owned a service but it’s based on you having W-2 employees 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 first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the mayhem 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot 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 reduce the 26 000 so what we’re seeing usually 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 internal revenue service so it’s huge obviously now the huge concern is why does no one learn about this due to the fact that appearance when I first found out about this when I first satisfied Josh you understand I have actually got great deals of investments in lots of business I’m a significant supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which lots of 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 use 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 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 said nah it can’t be true however when I dug around I even called to my political leader good friends Guv 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 individuals informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the worker retention credit you know what’s interesting you’re discussing the banks Kevin since 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was turmoil because remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never 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 done it previously do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose business is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is completely 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.
employer’s gross receipts go above 80% of a comparable 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 certifying salaries paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, usually, more or less than.
100 employees in 2019.
Business that specialize in ERC filing help usually offer knowledge and assistance to help services browse the intricate process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit For Working Through Covid
Eligibility Evaluation: These business will evaluate your company’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. If you fulfill the requirements for the credit and determine the optimum credit quantity you can claim, they can assist determine.
Documents and Calculation: ERC filing services will assist in collecting the needed documents, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit amount based on eligible wages and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the needed kinds and documents in your place. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have evolved gradually. These companies remain updated with the current changes and ensure that your filings comply with the most present standards. They can likewise provide continuous assistance if the IRS requests extra details or carries out an audit related to your ERC claim.
It’s important to research and vet any company providing ERC filing assistance to ensure their reliability and knowledge. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC submitting assistance.
Bear in mind that while these business can offer valuable assistance, it’s constantly a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and guarantee accurate 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 procedures. The objective of the ERC is to encourage services to keep and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies need to satisfy one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As pointed out previously, for 2021, a substantial decline is specified as a 20% decrease 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% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified incomes paid to employees, including specific health plan costs. 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: At first, services that received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they got a PPP loan. The very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, enabling eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for services to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Kind 941. The excess can be refunded to the employer if the credit exceeds the amount of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility criteria have actually evolved over time. The very best course of action is to talk to a tax professional or visit the main internal revenue service site for the most detailed and current info relating to the ERC, consisting of any recent legal changes or updates.
To receive the ERC, an organization should satisfy one of the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross invoices 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 exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC includes finishing the required kinds and including the credit on your work tax return (usually Type 941). The exact time it requires to process the credit can vary based upon a number of elements, consisting of the intricacy of your service and the workload of the internal revenue service. It’s advised to seek advice from a tax expert for assistance particular to your scenario.
There are numerous companies that can help with the procedure of claiming the ERC. Some popular companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based upon general understanding and may not show the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or visit the official IRS website for the most up-to-date and accurate details concerning eligibility, claiming treatments, and readily available assistance.
Less than 100. If the employer had 100 or fewer staff members on average in 2019, then the credit is based.
on salaries paid to all employees whether they really 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. The credit is if the company had more than 100 employees on average in 2019.
enabled only for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments however likewise a part of the expense of company.
provided healthcare. Employee Retention Credit For Working Through Covid
Employers can be immediately compensated for the credit by lowering the quantity of payroll taxes they.