Lets talk first about Employee Retention Credit How Many Employees :
Our group here what do these men doing everyone in this room is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have individuals truly find out about the program we should head to the space 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 customers validating that the check is on the way I mean you understand if you just begin to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I indicate consider how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed 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 know the check is chosen sure which’s when they pay so they do not pay anything until they in fact get the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the procedure has been finished and how many you think you’ve processed because you began this we’re about 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 one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re speaking about something truly crucial today the employee retention credit which the majority of you have actually never become aware of I certainly had not heard of it until very just recently and learned a lot about it because this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have workers 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 Principles they’re the biggest 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 supervisor and state give 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 have actually become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations 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 fine go on sorry I just need to ensure we got that point I mean that’s a huge distinction a loan versus cash money I like cash money that’s what we’re talking about 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 tough check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that person needed to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have actually owned an organization however it’s based upon 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 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 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 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 throughout that duration now let’s talk my preferred part cash how much can you get back per staff member 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 a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the turmoil 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 as much as five thousand Max and after that 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 worker that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be reduced 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 typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant 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 clearly now the huge question is why does nobody know about this since look when I initially heard about this when I initially fulfilled 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 many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not believe 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 and that were well should have and we used them wisely to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t understand about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one understand about the staff member retention credit you know what’s fascinating you’re talking about the banks Kevin since 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was mayhem because keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not 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 anybody about how to.
do this does your CFO know how to do this not actually he or she’s never ever 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 service and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose organization is fully or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, on average, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing help usually offer expertise and support to help services navigate the intricate process of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit How Many Employees
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can help determine if you meet the requirements for the credit and identify the optimum credit amount you can declare.
Paperwork and Calculation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit quantity based on eligible salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can review your previous payroll records and financials to identify prospective chances for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the necessary kinds and documents in your place. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have actually progressed with time. These companies remain updated with the current changes and ensure that your filings abide by the most present guidelines. If the Internal revenue service requests extra details or conducts an audit related to your ERC claim, they can likewise provide ongoing support.
It’s important to research study and veterinarian any business using ERC filing help to ensure their credibility and knowledge. Look for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax specialists who offer ERC filing support.
Keep in mind that while these business can offer valuable support, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure accurate filings.
The Worker 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 encourage companies to maintain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies need to fulfill one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As mentioned earlier, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified 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.
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 wages paid to staff members, including specific 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, companies that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, allowing qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Form 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually evolved with time. The best strategy is to seek advice from a tax professional or visit the official internal revenue service website for the most comprehensive and updated information regarding the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, an organization should meet among the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes finishing the required kinds and including the credit on your employment income tax return (generally Kind 941). The exact time it takes to process the credit can vary based upon several factors, consisting of the intricacy of your service and the workload of the internal revenue service. It’s recommended to seek advice from a tax expert for assistance particular to your situation.
There are several companies that can assist with the process of claiming the ERC. Some well-known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general understanding and might not reflect the most current updates or modifications to the ERC. It is necessary to consult with a tax professional or go to the main IRS website for the most precise and current info regarding eligibility, declaring procedures, and readily available assistance.
Less than 100. If the company had 100 or less employees on average in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. To put it simply, even if the.
workers worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
enabled only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not just cash payments but likewise a part of the expense of employer.
provided health care. Employee Retention Credit How Many Employees
Employers can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.