Lets talk first about Example Of Employee Retention Credit Calculation :
Our group here what do these people doing everyone in this room is helping teach people about ERC and uh always supply a stunning breakfast and have individuals really find out about the program we ought to head to the room where we have the ability to show a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I imply you know if you just begin to 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 indicate it’s just I imply consider the number of real customers 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 customer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything until they really get the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the process has actually been completed and the number of you believe you have actually processed since you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’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 Fantastic here you’re at my YouTube channel we’re talking about something really crucial today the staff member retention credit which the majority of you have never ever become aware of I certainly hadn’t become aware of it up until very just recently and learned a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call up your bank supervisor and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund alright go on sorry I just need to make certain we got that point I suggest that’s a big difference a loan versus cash cash I like money cash that’s what we’re talking about okay 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 actual money from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual had to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have owned a business but it’s based on you having W-2 workers 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 very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you return per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the mayhem of the pandemic so they wished to even get more to keep those employees 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot 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 two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the big question is why does nobody understand about this since look when I initially became aware of this when I first met Josh you know I’ve got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it because I use 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 deserved and we used them carefully to survive during the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my political leader buddies Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you know what’s interesting you’re discussing the banks Kevin since in the PPP loan process 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 nation 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 turmoil since 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 initial program and when they altered the law in 2021 the banks were not 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 anyone about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this service and bottom line my firm Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Because of COVID-19 or whose gross invoices, company whose service is totally or partially suspended.
decrease by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing support typically provide know-how and support to help organizations browse the complex procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Example Of Employee Retention Credit Calculation
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can claim, they can help identify.
Documents and Calculation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based on eligible wages and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to recognize possible chances for retroactive credits. They can assist you modify previous income tax return to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the needed kinds and documents in your place. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have developed in time. These business remain updated with the latest changes and guarantee that your filings adhere to the most existing guidelines. They can likewise provide continuous assistance if the IRS requests extra information or performs an audit related to your ERC claim.
It is essential to research study and vet any business providing ERC filing support to guarantee their credibility and proficiency. Look for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC submitting support.
Bear in mind that while these companies can provide important assistance, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure 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 procedures. The goal of the ERC is to encourage services to retain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, employers must fulfill one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned earlier, for 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified incomes paid to staff members, consisting of particular 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: At first, services that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they got a PPP loan. However, the very same earnings 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, allowing eligible companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to modify prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Kind 941. The excess can be refunded to the employer if the credit exceeds the quantity of work taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually evolved in time. The best course of action is to talk to a tax expert or check out the main IRS site for the most detailed and up-to-date info relating to the ERC, including any recent legal modifications or updates.
To receive the ERC, an organization must fulfill one of the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and companies that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC involves completing the required kinds and consisting of the credit on your employment tax return (usually Form 941). The exact time it takes 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 suggested to seek advice from a tax professional for assistance particular to your situation.
There are numerous business that can assist with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some widely known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies straight to ask about their fees and services.
Please keep in mind that the info supplied here is based upon basic understanding and may not reflect the most recent updates or changes to the ERC. It is essential to seek advice from a tax expert or visit the main internal revenue service site for the most accurate and updated information regarding eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on earnings paid to all workers whether they in fact 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. If the employer had more than 100 staff members typically in 2019, then the credit is.
permitted only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments but likewise a portion of the expense of employer.
offered health care. Example Of Employee Retention Credit Calculation
Companies can be instantly compensated for the credit by decreasing the amount of payroll taxes they.