Lets talk first about Employee Retention Credit Gross Receipts :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly supply a lovely breakfast and have people really learn about the program we ought to head to the room where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I mean you know if you simply begin to take a look at some 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 just I imply consider the number of real clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you know when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything till they actually get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their checking account and they can really rely on Wonder trust that the procedure has actually been ended up and the number of you believe you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require 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 Terrific here you’re at my YouTube channel we’re speaking about something really essential today the employee retention credit which the majority of you have never become aware of I definitely had not become aware of it until very just recently and learned a lot about it because this is probably the lowest cost 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 Ideas they’re the largest 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 state give me a loan it does not 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 going away soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services 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 exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I just have to make certain we got that point I imply that’s a big difference a loan versus money money I like cash cash 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 original cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get real money from the IRS all right so let’s talk about how it works because it sounds 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 money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have owned a company however it’s based upon you having W-2 workers 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 have to be on payroll for the very first six months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part cash just how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the mayhem of the pandemic so they wished to even get more to keep those employees 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 after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of cash it is now there’s a caution here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 thousand dollars a person 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 IRS so it’s big obviously now the big question is why does no one understand about this since look when I initially became aware of this when I initially fulfilled Josh you know I have actually got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it because I use 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 which were well deserved and we utilized them carefully to survive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my politician 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 bunch of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin due to the fact that 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 country 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 since remember in the original cares act you could not do both programs so if you had done PPP you might not do ERC in the original 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 ever made it clear to any person 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 companies 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 considering that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, company whose business is fully or partially suspended.
decrease by more than 50%.
Accessibility.
1. The credit is readily available to all employers despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by federal government order due to COVID-19.
throughout 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 an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, on average, basically than.
100 workers in 2019.
Business that specialize in ERC filing help usually supply knowledge and support to help businesses navigate the complex procedure of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Gross Receipts
Eligibility Evaluation: These business will assess your service’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you satisfy the requirements for the credit and determine the optimum credit amount you can declare, they can assist figure out.
Paperwork and Computation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based upon eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify potential chances for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the necessary types and paperwork in your place. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved with time. These companies stay updated with the latest changes and ensure that your filings adhere to the most existing guidelines. If the Internal revenue service requests additional information or performs an audit associated to your ERC claim, they can likewise provide continuous assistance.
It is very important to research study and vet any business offering ERC filing help to ensure their reliability and expertise. Search for established firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who offer ERC filing assistance.
Bear in mind that while these companies can offer important support, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to retain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit services, tax-exempt companies, and specific governmental entities. To qualify, companies must satisfy one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As mentioned previously, for 2021, a considerable decline is defined 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 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 employer’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of certified earnings paid to employees, consisting of particular 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, companies that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. The exact same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, allowing eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Type 941. The excess can be refunded to the company if the credit surpasses the quantity of work taxes owed.
It is very important to note that the ERC arrangements and eligibility requirements have progressed in time. The best strategy is to seek advice from a tax professional or visit the official internal revenue service site for the most detailed and current info regarding the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a company needs to satisfy one of the following criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact 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% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, federal government entities and businesses that received a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC involves finishing the necessary kinds and including the credit on your employment tax return (usually Kind 941). The exact time it takes to process the credit can vary based on a number of aspects, consisting of the complexity of your organization and the work of the IRS. It’s suggested to talk to a tax professional for guidance specific to your situation.
There are a number of business that can help with the process of claiming the ERC. Some widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on general understanding and might not show the most current updates or modifications to the ERC. It’s important to speak with a tax professional or visit the official internal revenue service site for the most updated and accurate info regarding eligibility, claiming treatments, and available help.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on salaries paid to all workers whether they actually worked or not. To put it simply, even if the.
workers worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled only for wages paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments but likewise a portion of the expense of employer.
provided health care. Employee Retention Credit Gross Receipts
Payment.
Employers can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.