Lets talk first about Employee Retention Credit Update 2022 :
Our group here what do these people doing everyone in this space is helping teach people about ERC and uh constantly provide a lovely breakfast and have individuals actually learn more about the program we should head to the room 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 hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I indicate you know if you just start to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply consider 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 verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you understand the check is opted for sure which’s when they pay so they do not pay anything till they in fact receive the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their checking account and they can genuinely rely on Wonder trust that the procedure has actually been finished and the number of you think you’ve processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you need you need professionals on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re discussing something really crucial today the worker retention credit which the majority of you have never heard of I certainly had not heard of it until very just recently and discovered a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply contact your bank manager and state 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’ve become yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations three 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 money cash payroll tax refund all right go on sorry I just need to make certain we got that point I imply that’s a big difference a loan versus cash money 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 beautiful difficult check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s worker retention credit that individual needed 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 employees right you had to have actually owned a business but it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the chaos of the pandemic so they wanted 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 as much as five thousand Max and after that what occurs 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 money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower 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 state hypothetically you owned a restaurant 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 IRS so it’s substantial certainly now the big question is why does no one know about this since appearance when I initially found out about this when I initially satisfied Josh you understand I’ve got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many numerous 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 think it because I utilize 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 should have and we used 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 contacted us to my politician good friends Guv Senators they didn’t know 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 people informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin because in the PPP loan process 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 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 process procedure that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you might 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 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 government never made it clear to anyone about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it before 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 company your accountant no your accountant’s never done this before unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our big big corporate clients have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose organization is completely or partially suspended.
decline by more than 50%.
1. The credit is available to all employers no matter size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages differs by whether an employer had, typically, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance usually provide proficiency and support to help businesses navigate the intricate process of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Update 2022
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you satisfy the requirements for the credit and identify the maximum credit amount you can claim, they can assist figure out.
Documentation and Estimation: ERC filing services will assist in collecting the needed documentation, such as payroll records and monetary statements, to support your claim. They will likewise help determine the credit quantity based upon eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to identify possible opportunities for retroactive credits. They can assist you amend previous income tax return to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the necessary forms and documentation on your behalf. This consists of finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have evolved gradually. These business stay updated with the current changes and ensure that your filings comply with the most existing standards. They can likewise supply continuous assistance if the internal revenue service requests additional info or carries out an audit related to your ERC claim.
It’s important to research study and veterinarian any business offering ERC filing support to guarantee their reliability and expertise. Look for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax experts who use ERC submitting support.
Keep in mind that while these business can offer valuable support, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure precise filings.
The Staff Member 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 businesses to maintain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, companies must fulfill one of two criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned previously, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified earnings paid to workers, consisting of particular health plan 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: Initially, businesses that got an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. The very same salaries 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, allowing qualified companies to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to keep in mind that the ERC provisions and eligibility requirements have developed with time. The best course of action is to consult with a tax professional or go to the official IRS site for the most comprehensive and current info regarding the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a company needs to fulfill one of the following criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and organizations that got a PPP loan might have limitations on claiming the credit.
The process for declaring the ERC involves completing the essential forms and including the credit on your employment income tax return (usually Type 941). The exact time it requires to process the credit can differ based on numerous elements, including the complexity of your service and the work of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your situation.
There are numerous companies that can assist with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these companies directly to inquire about their services and charges.
Please keep in mind that the info offered here is based on general knowledge and might not show the most current updates or changes to the ERC. It is very important to consult with a tax expert or check out the official IRS website for the most current and accurate information regarding eligibility, claiming procedures, and offered assistance.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on earnings paid to all workers 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 employer had more than 100 workers on average in 2019.
enabled only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments but likewise a portion of the expense of company.
provided health care. Employee Retention Credit Update 2022
Companies can be immediately repaid for the credit by lowering the quantity of payroll taxes they.