Lets talk first about Employee Retention Credit What Is It :
Our group here what do these men doing everybody in this room is assisting teach people about ERC and uh always offer a gorgeous breakfast and have people truly find out about the program we ought to head to the space where we are able to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I indicate you know if you simply begin 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 imply think about the number of real customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed 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 understand when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything up until they actually receive the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the process has actually been ended up and how many you believe you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require you need 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 speaking about something really important today the employee retention credit which the majority of you have actually never ever become aware of I certainly hadn’t heard of it until really 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’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank supervisor and say give me a loan it does not 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away soon you got to discover all 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 provided services 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 distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund alright go on sorry I just need to ensure we got that point I imply that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get real cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s worker retention credit that person had to be a worker 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 had to have owned a company however it’s based on 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 qualified 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 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout 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 estimation in 2020 to be exact Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the chaos 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 five 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because 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 six 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 somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York 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 undoubtedly now the huge question is why does no one know about this since appearance when I initially found out about this when I initially fulfilled Josh you know I have actually got lots of investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I don’t think it since I use the PPP we went through the money 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 been worthy of and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my politician pals Governor Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s interesting you’re speaking about 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 nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was turmoil because remember in the initial cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed 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 made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accountant’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business since 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have worked with bottom line to recover other government programs we have actually done sales tax and use tax unemployment tax work chance 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 designed to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
employer whose company is completely or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’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.
Computation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether a company had, usually, basically than.
100 workers in 2019.
Business that focus on ERC filing support generally supply know-how and support to help organizations navigate the complicated process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit What Is It
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help figure out if you fulfill the requirements for the credit and identify the optimum credit amount you can declare.
Documents and Computation: ERC filing services will assist in collecting the required paperwork, such as payroll records and monetary statements, to support your claim. They will likewise help determine the credit amount based upon eligible incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the essential forms and documentation in your place. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have developed in time. These companies remain updated with the most recent changes and make sure that your filings comply with the most present standards. If the Internal revenue service requests extra information or performs an audit related to your ERC claim, they can also provide ongoing support.
It is very important to research and veterinarian any company offering ERC filing assistance to guarantee their trustworthiness and proficiency. Try to find established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who provide ERC submitting support.
Bear in mind that while these companies can provide valuable assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure 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 goal of the ERC is to motivate companies to retain 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 available to qualified companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies need to fulfill one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As mentioned earlier, for 2021, a significant decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified earnings paid to staff members, consisting of certain health plan expenditures. The optimum credit per employee 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 enables organizations to declare the ERC even if they got a PPP loan. However, the exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, permitting qualified employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Kind 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC provisions and eligibility criteria have actually evolved over time. The best strategy is to consult with a tax professional or visit the official IRS site for the most detailed and updated info relating to the ERC, including any recent legal modifications or updates.
To get approved for the ERC, a business should satisfy one of the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and companies that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC involves finishing the essential forms and consisting of the credit on your employment income tax return (typically Type 941). The exact time it requires to process the credit can vary based upon a number of elements, consisting of the intricacy of your business and the work of the internal revenue service. It’s advised to speak with a tax expert for guidance specific to your situation.
There are numerous companies that can assist with the procedure of claiming the ERC. Some well-known business that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based upon basic knowledge and may not reflect the most recent updates or modifications to the ERC. It is essential to consult with a tax expert or visit the official IRS website for the most precise and up-to-date details concerning eligibility, claiming procedures, and offered assistance.
Less than 100. If the employer had 100 or fewer workers usually in 2019, then the credit is based.
on wages paid to all workers whether they actually worked or not. Simply put, even if the.
employees worked full time and made money 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.
allowed just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” includes not simply money payments however also a portion of the expense of employer.
supplied healthcare. Employee Retention Credit What Is It
Employers can be right away repaid for the credit by lowering the amount of payroll taxes they.