Lets talk first about Guidance On The Employee Retention Credit :
Our group here what do these guys doing everyone in this room is helping teach people about ERC and uh constantly provide a lovely breakfast and have individuals truly learn more about the program we should head to the space where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I mean you know if you simply start to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply think about the number of 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 customer so that’s how you’re able to track it you know when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their checking account and they can truly trust Wonder trust that the procedure has actually been finished and how many you think you have actually processed given that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you need specialists 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 actually essential today the employee retention credit which most of you have never ever become aware of I definitely had not heard of it until really recently and found out a lot about it due to the fact that this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call up your bank manager and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund all right go on sorry I simply need to make certain we got that point I suggest that’s a huge difference a loan versus money money I like cash cash that’s what we’re talking 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 gorgeous difficult check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that person needed 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 investors it’s for employees right you had to have actually owned a service however it’s based on you having W-2 employees 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six 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 three and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part money how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus because 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 up to five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of cash it is now there’s a caveat 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 lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the big concern is why does no one know about this due to the fact that appearance when I initially became aware of this when I first met Josh you know I’ve got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not think it because I utilize the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well should have and we used them sensibly 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 good friends Guv Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s fascinating 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 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 mayhem due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might 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 government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it previously do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this before unless you have an account that went into this business and bottom line my firm Kevin has been in business because 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose company is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company 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 service is fully or partially suspended by federal 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 the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing assistance typically provide competence and assistance to assist services navigate the intricate process of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Guidance On The Employee Retention Credit
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based on elements such as your market, profits, and operations. If you meet the requirements for the credit and identify the maximum credit amount you can declare, they can help figure out.
Documentation and Calculation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit quantity based upon qualified earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you modify prior tax returns to declare these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the essential kinds and documentation in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved gradually. These business stay updated with the latest changes and ensure that your filings adhere to the most current standards. They can likewise offer continuous support if the IRS demands extra information or conducts an audit related to your ERC claim.
It is necessary to research study and vet any company offering ERC filing support to guarantee their credibility and expertise. Look for established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who provide ERC filing assistance.
Keep in mind that while these business can provide valuable assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage organizations to keep and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, employers need to fulfill one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a significant decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of qualified earnings paid to workers, including specific health insurance costs. 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, organizations that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. Nevertheless, the very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing eligible employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for organizations to amend prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, normally Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the company.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have evolved gradually. The best strategy is to seek advice from a tax professional or go to the main internal revenue service website for the most up-to-date and in-depth info relating to the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, an organization must fulfill one of the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant 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% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the required forms and including the credit on your work tax return (typically Type 941). The exact time it takes to process the credit can vary based on several aspects, including the intricacy of your service and the workload of the internal revenue service. It’s suggested to speak with a tax expert for guidance specific to your situation.
There are several companies that can assist with the procedure of claiming the ERC. Some well-known business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on basic understanding and may not show the most current updates or changes to the ERC. It is very important to speak with a tax professional or go to the main IRS website for the most accurate and updated info regarding eligibility, declaring treatments, and offered assistance.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on salaries paid to all staff members 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. If the employer had more than 100 staff members on average in 2019, then the credit is.
allowed just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply cash payments however likewise a part of the expense of company.
supplied health care. Guidance On The Employee Retention Credit
Employers can be right away repaid for the credit by decreasing the quantity of payroll taxes they.