Lets talk first about Employee Retention Credit Tax Refund :
Our team here what do these guys doing everyone in this room is helping teach people about ERC and uh always provide a lovely breakfast and have people really learn about the program we ought to head to the room 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 hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you simply start to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I imply consider the number of actual customers 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 customer so that’s how you’re able to track it you understand when you
receive this you know the check is chosen sure which’s when they pay so they do not pay anything up until they really get the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their savings account and they can really rely on Wonder trust that the procedure 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 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require 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 crucial today the staff member retention credit which most of you have never ever become aware of I certainly had not become aware of it up until really just recently and learned a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have staff members between 5 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 not easy this isn’t like PPP we just call up your bank supervisor and say offer 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 have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed 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 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.
remedy the cash money payroll tax refund okay go on sorry I just need to make sure we got that point I mean that’s a big distinction a loan versus money cash I like cash money that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person needed to be an employee so I’m going to make the Presumption this money 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 an organization but 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 qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part money just how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wished to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caveat 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 reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New York 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 substantial certainly now the huge concern is why does nobody know about this because look when I first found out about this when I initially satisfied Josh you know I’ve got great deals of investments in great deals of companies I’m a major 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 found out about this I called BS I do not believe it because I utilize 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 deserved and we utilized them sensibly to survive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader pals Guv Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody know about the employee retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was chaos due to the fact that remember in the original cares act you could 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 since 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 understand how to do this not truly she or he’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accountant 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 working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home 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 staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose service is fully or partly suspended.
decrease by more than 50%.
Accessibility.
1. The credit is available to all employers regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. When the.
company’s gross invoices exceed 80% of a comparable 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 incomes paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, usually, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support normally supply proficiency and support to assist organizations browse the complex procedure of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Tax Refund
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based upon elements such as your industry, income, and operations. They can help figure out if you fulfill the requirements for the credit and recognize the maximum credit amount you can claim.
Documents and Computation: ERC filing services will assist in collecting the necessary documents, such as payroll records and financial statements, to support your claim. They will also assist compute the credit amount based on qualified wages and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can review your past payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you change previous tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the needed forms and paperwork on your behalf. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved in time. These business stay updated with the latest modifications and ensure that your filings comply with the most current guidelines. They can likewise supply ongoing assistance if the IRS requests extra details or conducts an audit related to your ERC claim.
It is necessary to research study and vet any business using ERC filing assistance to guarantee their reliability and competence. Try to find established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who provide ERC submitting support.
Bear in mind that while these companies 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 informed decisions and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage services to maintain and pay their workers 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 companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies must meet one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As pointed out previously, 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 considerable decline is specified as a 20% decline in gross receipts compared to the 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 company’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of qualified earnings paid to staff members, including certain health plan expenses. 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: At first, organizations that got an Income Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. However, the very same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, allowing qualified employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Kind 941. The excess can be refunded to the company if the credit goes beyond the amount of employment taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have evolved over time. The very best strategy is to speak with a tax expert or check out the main IRS website for the most updated and detailed information regarding the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a company needs to satisfy among the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. 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 decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and services that got a PPP loan might have constraints on claiming the credit.
The process for declaring the ERC includes completing the essential types and including the credit on your work income tax return (usually Type 941). The exact time it requires to process the credit can vary based on numerous factors, consisting of the intricacy of your service and the workload of the IRS. It’s suggested to talk to a tax professional for guidance specific to your scenario.
There are a number of companies that can help with the procedure of claiming the ERC. Some well-known business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based upon general understanding and might not show the most recent updates or modifications to the ERC. It is essential to seek advice from a tax expert or visit the main internal revenue service site for the most current and precise information relating to eligibility, claiming treatments, and offered support.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on wages paid to all staff members whether they in fact worked or not. In other words, even if the.
staff members worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
permitted only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but also a portion of the cost of company.
supplied health care. Employee Retention Credit Tax Refund
Payment.
Companies can be instantly repaid for the credit by lowering the amount of payroll taxes they.