Lets talk first about Employee Retention Credit Income Tax :
Our group here what do these guys doing everybody in this room is assisting teach people about ERC and uh always provide a lovely breakfast and have individuals actually learn more about the program we ought to head to the space where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I suggest you know if you simply start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate think of 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 verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they don’t pay anything until they really get the money they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their checking account and they can really rely on Wonder trust that the procedure has actually been ended up 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 plainly they know what they’re doing which’s what you need you require specialists 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 talking about something really essential today the staff member retention credit which the majority of you have never ever heard of I certainly hadn’t become aware of it until really recently and found out a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members in 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 challenging this isn’t like PPP we just phone your bank manager and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three 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 difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a big distinction a loan versus cash cash I like money 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 beautiful hard check in the mail where you get real cash from the IRS 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 needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have actually owned a business however it’s based upon you having W-2 workers 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 six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that happen um they simply changed 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 five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be decreased from the twenty six 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 money someplace around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big certainly now the big concern is why does no one understand about this since appearance when I initially heard about this when I first fulfilled Josh you know I’ve got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t think it since I use 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 should have and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my political leader buddies Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one know about the worker retention credit you know what’s intriguing you’re speaking about 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 nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was mayhem since keep in mind in the original cares act you might not do both programs so if you had done PPP you might not do ERC in the original 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 made it clear to anybody about how to.
do this does your CFO know 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 companies yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that went into this organization and bottom line my company Kevin has been in business because 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate clients have worked with bottom line to recuperate other government programs we have actually 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 employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose organization is fully or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are 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.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries varies by whether a company had, on average, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support typically supply proficiency and assistance to help businesses browse the intricate procedure of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Income Tax
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon aspects such as your market, profits, and operations. They can help determine if you satisfy the requirements for the credit and recognize the maximum credit amount you can declare.
Documents and Computation: ERC filing services will help in collecting the needed documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit quantity based upon qualified salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the essential kinds and paperwork in your place. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have progressed gradually. These business stay upgraded with the current modifications and guarantee that your filings abide by the most existing guidelines. If the IRS requests extra info or carries out an audit associated to your ERC claim, they can likewise offer ongoing assistance.
It’s important to research study and veterinarian any company offering ERC filing help to guarantee their reliability and knowledge. Try to find established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC submitting assistance.
Bear in mind that while these business can provide valuable help, it’s always a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure precise filings.
The Staff Member 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 workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies must fulfill one of two requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As pointed out previously, for 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of qualified salaries paid to workers, including particular health plan 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 received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. The very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, enabling eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, generally Kind 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to note that the ERC arrangements and eligibility criteria have developed over time. The best strategy is to consult with a tax expert or go to the main internal revenue service site for the most current and detailed info regarding the ERC, including any current legal modifications or updates.
To qualify for the ERC, a business needs to meet among the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and businesses that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the required types and consisting of the credit on your work income tax return (generally Type 941). The exact time it takes to process the credit can vary based on numerous factors, including the intricacy of your service and the workload of the internal revenue service. It’s recommended to talk to a tax expert for assistance specific to your situation.
There are a number of companies that can aid with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some well-known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these business straight to inquire about their costs and services.
Please note that the details provided here is based on basic understanding and may not reflect the most recent updates or modifications to the ERC. It is essential to seek advice from a tax expert or go to the official IRS site for the most precise and up-to-date details regarding eligibility, declaring procedures, and readily available help.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on earnings paid to all workers whether they in fact 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. If the employer had more than 100 staff members usually in 2019, then the credit is.
enabled just for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments however likewise a part of the expense of employer.
offered health care. Employee Retention Credit Income Tax
Employers can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.