Lets talk first about Employee Retention Credit Tipped Employees :
Our team here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly supply a beautiful breakfast and have people really find out about the program we need to head to the space where we are able to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I imply you know if you simply begin to take a look at a few 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 simply I imply consider how many actual customers that went through the program yeah this is the very end this is the celebration 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 understand when you
receive this you understand the check is chosen sure and that’s when they pay so they do not pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has actually been finished and how many you believe you’ve processed considering 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 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 employee retention credit which the majority of you have actually never ever heard of I definitely had not become aware of it till really recently and found out a lot about it due to the fact that this is probably the lowest expense of capital for any small business 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 Principles 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 just phone your bank manager and say provide 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 representative for this I enjoy this program it’s disappearing very soon you got to discover everything about it let’s talk staff member 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 used companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply have to make certain we got that point I imply that’s a big difference a loan versus cash cash I like money money that’s what we’re speaking 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 original cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual had to be an employee 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 needed to have 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 workers 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 very first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 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 duration now let’s talk my preferred part money how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that 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 takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caution here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the huge question is why does no one know about this because look when I first became aware of this when I first fulfilled Josh you understand I have actually got lots of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of 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 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 became aware of this I said nah it can’t be true but when I dug around I even called to my political leader buddies Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was mayhem because keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not 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 actually he or she’s never ever 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 accountant’s never done this before unless you have an account that entered into this business and bottom line my firm Kevin has been in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries differs by whether a company had, usually, basically than.
100 employees in 2019.
Companies that focus on ERC filing assistance typically supply know-how and assistance to assist organizations navigate the complex process of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Tipped Employees
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based on aspects 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 assist identify.
Paperwork and Computation: ERC filing services will assist in collecting the essential documentation, such as payroll records and monetary statements, to support your claim. They will also help compute the credit quantity based on qualified wages and other qualifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to determine potential opportunities for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the needed kinds and documentation in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have progressed over time. These companies remain updated with the latest changes and guarantee that your filings abide by the most existing standards. They can likewise offer ongoing support if the IRS requests extra information or conducts an audit related to your ERC claim.
It is essential to research and vet any business using ERC filing assistance to ensure their credibility and expertise. Search for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who offer ERC submitting assistance.
Bear in mind that while these companies can provide important support, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate organizations to keep and pay their staff members throughout 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, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers need to fulfill one of two criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned earlier, for 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the exact 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 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 amounts to a percentage (as much as 70%) of certified earnings paid to employees, including certain health insurance expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received an Income Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The same earnings can not be used to claim 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 qualified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, normally Kind 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility criteria have developed over time. The very best course of action is to seek advice from a tax professional or go to the main IRS website for the most detailed and up-to-date information regarding the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a business must fulfill among the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and companies that received a PPP loan may have restrictions on claiming the credit.
The procedure for declaring the ERC includes completing the required kinds and consisting of the credit on your work income tax return (typically Form 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 workload of the IRS. It’s advised to speak with a tax expert for assistance specific to your situation.
There are a number of companies that can help with the process of claiming the ERC. Some well-known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on basic understanding and may not show the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or go to the official IRS site for the most precise and up-to-date info regarding eligibility, claiming treatments, and readily available assistance.
Less than 100. If the company had 100 or fewer employees usually in 2019, then the credit is based.
on incomes paid to all employees whether they in fact worked or not. In other words, even if the.
employees worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
enabled just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply money payments however also a portion of the expense of company.
provided healthcare. Employee Retention Credit Tipped Employees
Companies can be instantly compensated for the credit by reducing the quantity of payroll taxes they.