Lets talk first about Employee Retention Credit Government Contractors :
Our group here what do these guys doing everyone in this room is helping teach people about ERC and uh always offer a stunning breakfast and have people really discover the program we need to head to the space where we are able to show some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I indicate 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 imply it’s simply I suggest think about the number of actual customers that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are verified 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
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything till they in fact 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 savings account and they can truly rely on Wonder trust that the process has been finished and the number of you believe you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need you need specialists 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 discussing something actually essential today the staff member retention credit which the majority of you have actually never heard of I certainly had not become aware of it till very recently and found out a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 your bank supervisor and say give me a loan it doesn’t 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 have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I just need to make sure we got that point I suggest that’s a huge distinction a loan versus cash money I like money money that’s what we’re talking about okay 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 difficult check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s worker retention credit that individual had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned a service however it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 employees 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 need to be on payroll for the very first six months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. alright 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 cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the chaos 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 as much as 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be decreased from the twenty 6 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 cash somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment 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 IRS so it’s substantial obviously now the huge concern is why does no one learn about this because appearance when I initially found out about this when I initially met Josh you know I’ve got great deals of investments in lots of companies I’m a major advocate for entrepreneurship in America and make many lots of investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I do not believe it since I utilize the PPP we went through the cash 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 been worthy of and we utilized them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my political leader friends Governor Senators they didn’t learn about it I imply 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 since you took the PPP also not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it really 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 process 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 might not do both programs so if you had 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 government never made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has been in business since 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge business clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The worker 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 wages paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose company is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing support usually supply competence and assistance to assist services navigate the complicated procedure of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Government Contractors
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. If you fulfill the requirements for the credit and identify the maximum credit quantity you can claim, they can help identify.
Paperwork and Computation: ERC filing services will help in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit amount based upon eligible wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the needed kinds and paperwork on your behalf. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved over time. These companies remain upgraded with the most recent modifications and make sure that your filings comply with the most current standards. They can also supply ongoing support if the internal revenue service requests additional information or performs an audit related to your ERC claim.
It is very important to research and vet any business using ERC filing support to guarantee their reliability and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who offer ERC submitting support.
Bear in mind that while these business can offer valuable support, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate companies to maintain and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies need to fulfill one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices 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 certified salaries paid to workers, consisting of certain health plan expenditures. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. The exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, enabling qualified companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Type 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC provisions and eligibility criteria have developed in time. The very best course of action is to speak with a tax expert or go to the official internal revenue service site for the most comprehensive and up-to-date information regarding the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a service needs to meet among the following requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial 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 right away preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and services that received a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC involves completing the essential types and consisting of the credit on your work tax return (usually Type 941). The exact time it requires to process the credit can vary based upon several factors, including the intricacy of your service and the workload of the internal revenue service. It’s suggested to seek advice from a tax professional for assistance particular to your scenario.
There are numerous companies that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies directly to inquire about their costs and services.
Please keep in mind that the details supplied here is based upon general knowledge and may not show the most recent updates or changes to the ERC. It is essential to consult with a tax professional or go to the main internal revenue service site for the most current and accurate information concerning eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on wages paid to all staff members 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. The credit is if the company had more than 100 workers on average in 2019.
permitted just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but also a part of the cost of company.
offered healthcare. Employee Retention Credit Government Contractors
Employers can be right away repaid for the credit by reducing the quantity of payroll taxes they.