Lets talk first about Employee Retention Credit Include Tips :
Our group here what do these people doing everybody in this space is assisting teach individuals about ERC and uh always supply a beautiful breakfast and have individuals actually learn more about the program we should head to the room where we have the ability to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I suggest you know if you just start to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I imply consider how many real 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 IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you know the check is gone for sure which’s when they pay so they do not pay anything until they in fact get the money they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their bank account and they can truly trust Wonder trust that the process has been ended up and the number of you think you’ve processed since you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually important today the staff member retention credit which the majority of you have actually never ever heard of I certainly had not heard of it until extremely just recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank manager and state offer me a loan it does not 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 representative for this I enjoy this program it’s disappearing soon you got to learn all about it let’s talk employee 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 services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund alright go on sorry I simply need to ensure we got that point I imply that’s a huge distinction 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 beautiful tough check in the mail where you get actual money 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 individual had to be an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have owned an organization however it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 workers 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 very first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part money 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 exact Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be reduced 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 on average Kevin is if you took PPP money someplace 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 staff members 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 big concern is why does nobody understand about this due to the fact that look when I first became aware of this when I initially satisfied Josh you know I’ve got lots of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that I use the PPP we went through the cash 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 been worthy of and we used them sensibly to survive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even contacted us to my politician buddies Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a lot of people told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody know about the staff member retention credit you know what’s fascinating you’re talking about the banks Kevin due to the fact that 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 procedure 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 mayhem since remember in the initial cares act you could refrain from doing 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 since it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that went into this business and bottom line my firm Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge business customers have dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness 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 designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose business is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether a company had, on average, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support normally provide proficiency and support to help services navigate the intricate procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Include Tips
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based on elements such as your market, profits, and operations. They can assist figure out if you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare.
Documents and Computation: ERC filing services will assist in gathering the essential documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit quantity based upon eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and submit the necessary kinds and paperwork on your behalf. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have evolved gradually. These companies remain updated with the latest changes and guarantee that your filings comply with the most existing standards. If the IRS requests extra details or performs an audit associated to your ERC claim, they can also provide continuous assistance.
It’s important to research and veterinarian any business providing ERC filing support to ensure their reliability and knowledge. Try to find established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who provide ERC submitting assistance.
Bear in mind that while these business can offer valuable support, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure precise 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 businesses to keep and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit services, tax-exempt organizations, and particular governmental entities. To certify, companies must meet one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As mentioned previously, for 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified earnings paid to staff members, consisting of specific health insurance expenses. 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: At first, services that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits 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 Provision: The ERC has been retroactively broadened and boosted, allowing eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to modify prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Form 941. The excess can be reimbursed to the company if the credit exceeds the quantity of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have evolved over time. The best course of action is to talk to a tax professional or go to the main IRS website for the most in-depth and updated info relating to the ERC, including any current legislative modifications or updates.
To qualify for the ERC, a business needs to satisfy among the following criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a significant decrease is specified as a 20% decline 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 invoices compared to the 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. For example, government entities and companies that got a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC includes finishing the essential types and including the credit on your employment income tax return (usually Form 941). The exact time it takes to process the credit can differ based upon numerous factors, including the complexity of your company and the work of the IRS. It’s suggested to consult with a tax expert for guidance particular to your situation.
There are numerous companies that can help with the process of claiming the ERC. Some widely known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based upon basic understanding and may not show the most current updates or changes to the ERC. It is necessary to talk to a tax expert or visit the main internal revenue service site for the most accurate and updated details regarding eligibility, claiming procedures, and available help.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on incomes paid to all workers whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
allowed only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply cash payments however also a part of the expense of company.
supplied health care. Employee Retention Credit Include Tips
Companies can be immediately repaid for the credit by minimizing the quantity of payroll taxes they.