Lets talk first about Employee Retention Credit Reduce Wages On Tax Return :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh constantly offer a stunning breakfast and have people truly find out about the program we should head to the space where we have the ability to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I indicate you understand if you simply start to take a 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 simply I suggest think of how many real clients 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 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 have the ability to track it you know when you
get this you know the check is gone for sure and that’s when they pay so they do not pay anything until they in fact receive the money they do not pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the process has actually been ended up and how many you believe you have actually processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you need 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually essential today the employee retention credit which the majority of you have never ever become aware of I certainly hadn’t become aware of it till extremely recently and found out a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest 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 manager 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 become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk staff member 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 used organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone 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 money money payroll tax refund okay 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 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 initial cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have actually owned a company but it’s based on you having W-2 staff members 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of 5 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 7 thousand per quarter how did that occur 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 workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five thousand Max and then 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 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caution here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 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 employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the big concern is why does nobody understand about this since appearance when I initially heard about this when I first fulfilled Josh you understand I’ve got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous many financial investments in business owners of which many suffered through the pandemic when I initially 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 really easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them wisely to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my politician friends Governor Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan procedure 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 huge 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 chaos because keep in mind in the initial cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never ever 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 in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have dealt with bottom line to recover other government programs we’ve 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 designed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose company is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries 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 incomes varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing support generally supply expertise and support to assist organizations navigate the complicated process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Reduce Wages On Tax Return
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can claim, they can assist figure out.
Paperwork and Calculation: ERC filing services will assist in gathering the required documentation, such as payroll records and financial statements, to support your claim. They will also assist determine the credit quantity based upon eligible wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you modify previous income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the essential types and documents on your behalf. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved over time. These business remain updated with the latest modifications and ensure that your filings abide by the most present guidelines. If the IRS demands additional info or carries out an audit associated to your ERC claim, they can also provide ongoing assistance.
It’s important to research and vet any business providing ERC filing assistance to guarantee their reliability and competence. Look for established firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who offer ERC filing support.
Keep in mind that while these business can supply important support, it’s constantly a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to retain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies should meet one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease 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 amount is equal to a portion (approximately 70%) of qualified incomes paid to workers, consisting of certain health plan expenditures. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. The very same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, enabling qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Form 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of work taxes owed.
It is essential to note that the ERC provisions and eligibility requirements have actually developed gradually. The best course of action is to seek advice from a tax professional or check out the official IRS website for the most comprehensive and up-to-date info concerning the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, an organization should fulfill one of the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. 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 considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and companies that received a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC involves finishing the necessary kinds and consisting of the credit on your employment tax return (generally Kind 941). The exact time it takes to process the credit can differ based upon numerous aspects, including the complexity of your business and the workload of the internal revenue service. It’s suggested to consult with a tax professional for assistance specific to your situation.
There are a number of business that can help with the procedure of declaring the ERC. Some well-known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on basic knowledge and may not show the most current updates or changes to the ERC. It is essential to seek advice from a tax professional or check out the official internal revenue service website for the most precise and up-to-date info concerning eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all employees whether they actually 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. The credit is if the company had more than 100 workers on average in 2019.
permitted just for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply cash payments but also a part of the expense of company.
provided healthcare. Employee Retention Credit Reduce Wages On Tax Return
Companies can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.