Lets talk first about Employee Retention Credit Full Or Partial Suspension :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh constantly offer a beautiful breakfast and have individuals really discover the program we ought to head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I suggest you know if you just begin to look at some 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 just I imply think about the number of 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 IRS 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 chosen sure which’s when they pay so they don’t pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their checking account and they can really trust Wonder trust that the process has been finished and the number of you think you have actually processed given that you started this we’re about 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 professionals 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 Terrific here you’re at my YouTube channel we’re speaking about something really crucial today the staff member retention credit which most of you have actually never ever become aware of I definitely hadn’t heard of it up until very just recently and found out a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just phone 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 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 soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used organizations 3 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund okay go on sorry I just need to ensure we got that point I mean that’s a huge distinction a loan versus money money I like money money that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a gorgeous 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 sounds like to me if it’s a if it’s employee retention credit that person needed to be a staff member 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 employees right you had to have actually owned a service however it’s based upon you having W-2 workers in America not 10.99. so 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 need to be on payroll for the first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll 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 have to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished 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 as much as five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 money it is now there’s a caution here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the huge question is why does no one learn about this since look when I first found out about this when I initially met Josh you know I’ve got lots of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many many investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I don’t think it since I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them sensibly to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody know about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it very clear that if you desired 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 just procedure procedure that’s all um and here there was mayhem since remember in the initial cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 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 prior to unless you have an account that entered into this service and bottom line my company Kevin has stayed in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big corporate customers have actually worked with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee 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 approximately $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, company whose company is completely or partly suspended.
decline by more than 50%.
Availability.
1. The credit is readily available to all employers regardless of size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. When 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 incomes paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing support typically offer know-how and assistance to assist companies navigate the complex procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Full Or Partial Suspension
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. They can assist determine if you satisfy the requirements for the credit and determine the maximum credit amount you can declare.
Documents and Computation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit amount based on eligible earnings and other certifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to identify potential opportunities for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the essential types and documentation on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have developed with time. These business stay updated with the latest changes and ensure that your filings comply with the most existing guidelines. If the IRS demands additional information or conducts an audit associated to your ERC claim, they can also supply ongoing support.
It is necessary to research study and veterinarian any business offering ERC filing assistance to guarantee their reliability and expertise. Look for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC filing support.
Bear in mind that while these business can provide important assistance, it’s always a great idea to have a standard understanding of the ERC requirements and process 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 procedures. The objective of the ERC is to encourage companies to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, employers must satisfy one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As discussed earlier, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified earnings paid to workers, consisting of specific 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, companies that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. However, the exact same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing qualified employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Form 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have actually developed with time. The best course of action is to talk to a tax professional or visit the official IRS site for the most updated and detailed information concerning the ERC, consisting of any current legal changes or updates.
To receive the ERC, an organization needs to meet one of the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and businesses that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC involves completing the required kinds and consisting of the credit on your employment income tax return (usually Kind 941). The exact time it requires to process the credit can differ based upon numerous factors, including the intricacy of your company and the workload of the IRS. It’s suggested to talk to a tax professional for assistance specific to your scenario.
There are several companies that can assist with the procedure of claiming the ERC. Some well-known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon basic knowledge and may not reflect the most current updates or modifications to the ERC. It is essential to talk to a tax expert or go to the main IRS website for the most updated and accurate information concerning eligibility, declaring procedures, and offered assistance.
Less than 100. If the company had 100 or less staff members on average in 2019, then the credit is based.
on earnings paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees usually in 2019, then the credit is.
enabled only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “incomes” consists of not just cash payments however likewise a part of the cost of company.
offered healthcare. Employee Retention Credit Full Or Partial Suspension
Payment.
Companies can be right away compensated for the credit by decreasing the quantity of payroll taxes they.