Lets talk first about Employee Retention Credit Qualified Employer :
Our group here what do these guys doing everyone in this space is assisting teach people about ERC and uh always supply a beautiful breakfast and have people truly discover 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 numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I suggest you understand if you simply start 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 suggest it’s just I mean think of the number of actual 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 confirmed 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 know when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the process has actually been ended up and how many you think you have actually processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand 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 among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something actually important today the worker retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it up until extremely just recently and found out a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 simply call up your bank supervisor and say provide 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I simply have to make sure we got that point I imply that’s a huge distinction a loan versus cash cash I like money cash that’s what we’re speaking about fine 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 lovely difficult check in the mail where you get actual cash from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s staff member retention credit that person had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have actually owned a company however it’s based on 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 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 six 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 two and three of 2021. all right 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 get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the chaos 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 then what happens 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 6 thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be lowered 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 somewhere around 10 thousand dollars an individual 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 internal revenue service so it’s big obviously now the huge question is why does no one understand about this because look when I initially became aware of this when I first met Josh you understand I’ve got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I don’t 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 deserved and we utilized them carefully to stay alive during the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it really 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 procedure 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 original cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing 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 government never made it clear to anybody about how to.
do this does your CFO know 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 business your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this service and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big huge business clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance 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 developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
company whose company is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies 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 employer’s business is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end 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 salaries paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether a company had, on average, basically than.
100 workers in 2019.
Business that focus on ERC filing help normally supply knowledge and assistance to assist companies browse the complicated process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Qualified Employer
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon factors such as your market, income, and operations. If you satisfy the requirements for the credit and determine the optimum credit quantity you can claim, they can help determine.
Paperwork and Estimation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will also help compute the credit amount based upon eligible incomes and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to determine prospective opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the needed types and documents on your behalf. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have progressed with time. These business remain updated with the latest changes and ensure that your filings abide by the most current guidelines. They can also offer continuous support if the internal revenue service requests extra information or performs an audit related to your ERC claim.
It is essential to research study and vet any company offering ERC filing support to guarantee their reliability and proficiency. Search for recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who offer ERC submitting support.
Bear in mind that while these companies can provide important assistance, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to keep and pay their workers 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 eligible companies, consisting of for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers must meet one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of qualified incomes paid to employees, including particular health insurance costs. The maximum 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 got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they received a PPP loan. The exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, permitting qualified companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for services to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, normally Type 941. The excess can be reimbursed to the company if the credit exceeds the amount of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually progressed with time. The best strategy is to seek advice from a tax professional or check out the main IRS site for the most comprehensive and current info concerning the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a service needs to fulfill one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and companies that received a PPP loan may have constraints on declaring the credit.
The procedure for claiming the ERC includes finishing the required forms and including the credit on your work tax return (typically Kind 941). The exact time it requires to process the credit can vary based on several factors, consisting of the complexity of your company and the work of the internal revenue service. It’s advised to consult with a tax expert for guidance specific to your situation.
There are a number of business that can assist with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to inquire about their services and charges.
Please keep in mind that the info provided here is based upon basic understanding and might not reflect the most recent updates or modifications to the ERC. It is very important to seek advice from a tax expert or go to the official internal revenue service website for the most up-to-date and accurate information regarding eligibility, declaring treatments, and offered assistance.
Less than 100. If the employer had 100 or less staff members usually in 2019, then the credit is based.
on salaries paid to all workers whether they in fact worked or not. In other words, 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 workers on average in 2019.
enabled only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not simply cash payments but likewise a portion of the cost of company.
supplied healthcare. Employee Retention Credit Qualified Employer
Employers can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.