Lets talk first about Employee Retention Credit Qualifying Quarters :
Our group here what do these men doing everyone in this room is assisting teach people about ERC and uh always provide a gorgeous breakfast and have people truly learn about the program we ought to head to the space where we have the ability to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I imply you understand 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 suggest it’s just I mean think of how many real customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified 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 know when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything up until they really get the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their bank account and they can truly rely on Wonder trust that the procedure has been finished and how many you believe you’ve processed because 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 require experts 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 discussing something actually crucial today the worker retention credit which the majority of you have never ever become aware of I definitely had not heard of it up until extremely recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 call your bank supervisor and state offer 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 ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund okay go on sorry I simply need to make sure we got that point I suggest that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re talking about all right 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 initial cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that individual needed to be a worker 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 staff members right you needed to have actually owned an organization however it’s based upon you having W-2 employees 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 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part cash how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 occurs 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 6 thousand dollars per employee that is because that’s a lot of cash it is now there’s a caution here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York 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 internal revenue service so it’s substantial obviously now the huge concern is why does nobody learn about this because look when I initially became aware of this when I first met 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 financial investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it since I use the PPP we went through the money 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 used them sensibly to survive throughout the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician friends Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you wanted 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 simply procedure process that’s all um and here there was mayhem due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they altered 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 federal government never ever made it clear to any person about how to.
do this does your CFO know how to do this not actually he or she’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big business customers have actually worked with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
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 invoices, employer whose service is totally or partially suspended.
decline by more than 50%.
Accessibility.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of certifying earnings differs by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that focus on ERC filing help usually offer proficiency and assistance to assist services navigate the complex procedure of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Qualifying Quarters
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare, they can help identify.
Documentation and Estimation: ERC filing services will help in collecting the essential documents, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit amount based on qualified salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you change prior tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the necessary kinds and documentation in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have developed gradually. These companies stay updated with the latest modifications and guarantee that your filings comply with the most existing guidelines. If the IRS demands extra details or performs an audit related to your ERC claim, they can also supply continuous support.
It is very important to research study and veterinarian any company providing ERC filing support to ensure their credibility and knowledge. Look for established firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who use ERC submitting assistance.
Remember that while these business can provide valuable help, it’s always a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and guarantee 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 procedures. The goal of the ERC is to motivate businesses to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, employers must meet one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts 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 company’s share of Social Security taxes. The credit quantity amounts to a portion (up to 70%) of qualified wages paid to employees, consisting of specific health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received an Income Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. The very same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling qualified companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, generally Form 941. The excess can be refunded to the company if the credit exceeds the amount of employment taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have evolved gradually. The very best strategy is to speak with a tax professional or visit the main IRS website for the most detailed and up-to-date information concerning the ERC, including any recent legal modifications or updates.
To get approved for the ERC, a service must meet among the following criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a substantial decrease 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 same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and businesses that received a PPP loan might have constraints on claiming the credit.
The process for declaring the ERC includes finishing the essential types and including the credit on your employment income tax return (typically Kind 941). The exact time it takes to process the credit can vary based upon a number of aspects, consisting of the intricacy of your service and the workload of the IRS. It’s suggested to speak with a tax professional for guidance 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 popular business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these business straight to inquire about their services and charges.
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 talk to a tax professional or go to the official IRS website for the most precise and up-to-date info regarding eligibility, claiming procedures, and offered help.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings 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 company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments but likewise a part of the cost of company.
provided health care. Employee Retention Credit Qualifying Quarters
Payment.
Companies can be immediately compensated for the credit by reducing the quantity of payroll taxes they.