Lets talk first about Employee Retention Credit How Does It Work :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals really learn about the program we need to head to the space where we are able to display a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I indicate you know if you just begin to take a 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 simply I mean consider how many 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 verified 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 understand the check is gone for sure which’s when they pay so they don’t pay anything until they actually get the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the process has been finished and how many you think you’ve processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you need you need 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 Wonderful here you’re at my YouTube channel we’re talking about something really crucial today the worker retention credit which most of you have never become aware of I definitely had not become aware of it till extremely 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’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call 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 tell us all 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 soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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.
remedy the money money payroll tax refund all right go on sorry I simply have to make sure we got that point I suggest that’s a big distinction a loan versus money money I like cash 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 beautiful tough 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 sounds like to me if it’s a if it’s worker retention credit that individual had to be an employee so I’m going to make the Presumption 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 staff members 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 have 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 walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the turmoil 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 as much as 5 thousand Max and after that 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 five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caution here the PPP money would have to be minimized 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 on average Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge clearly now the big question is why does nobody understand about this due to the fact that look when I initially found out about this when I first fulfilled Josh you understand I have actually got great deals of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous lots of investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I do not believe it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them wisely to survive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my political leader friends Governor Senators they didn’t understand 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 individuals informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 procedure procedure that’s all um and here there was chaos due to the fact that keep in mind in the original cares act you could not do both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this organization and bottom line my company Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose service is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether a company had, usually, basically than.
100 employees in 2019.
Companies that focus on ERC filing support generally supply competence and support to help services browse the complex process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit How Does It Work
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based on elements such as your market, revenue, and operations. If you meet the requirements for the credit and determine the maximum credit amount you can claim, they can help determine.
Documentation and Calculation: ERC filing services will help in collecting the needed documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based upon eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine potential chances for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the essential forms and documentation on your behalf. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually evolved with time. These companies stay upgraded with the most recent changes and guarantee that your filings comply with the most current guidelines. If the IRS requests additional info or carries out an audit related to your ERC claim, they can also supply ongoing assistance.
It is essential to research study and vet any business using ERC filing support to ensure their credibility and proficiency. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax specialists who use ERC filing support.
Bear in mind that while these companies can offer important support, it’s always a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage organizations to maintain 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 offered to eligible employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers need to satisfy one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As pointed out previously, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease 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 (as much as 70%) of qualified earnings paid to workers, including particular health insurance costs. The optimum credit per employee 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 companies to declare the ERC even if they received a PPP loan. The exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting eligible employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, generally Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the quantity of work taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have actually progressed gradually. The best strategy is to talk to a tax expert or go to the main internal revenue service site for the most detailed and updated information relating to the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a service needs to fulfill among the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline 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 available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and companies that got a PPP loan may have constraints on declaring the credit.
The procedure for claiming the ERC involves finishing the essential forms and including the credit on your employment income tax return (usually Type 941). The exact time it takes to process the credit can differ based on a number of elements, including the intricacy of your business and the workload of the IRS. It’s advised to speak with a tax expert for guidance specific to your circumstance.
There are a number of business that can help with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to inquire about their costs and services.
Please note that the information supplied here is based upon general knowledge and may not reflect the most recent updates or changes to the ERC. It is essential to talk to a tax professional or visit the main IRS site for the most accurate and current details relating to eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
staff members worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a part of the expense of company.
offered healthcare. Employee Retention Credit How Does It Work
Employers can be immediately repaid for the credit by lowering the quantity of payroll taxes they.