Lets talk first about How Do You Claim The Employee Retention Credit :
Our group here what do these guys doing everybody in this space is helping teach individuals about ERC and uh always provide a gorgeous breakfast and have people really find out about the program we ought to head to the space where we have the ability to display 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 millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you simply begin to 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 imply it’s just I suggest consider how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified 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’re able to track it you understand when you
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything up until they really receive the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their savings account and they can really rely on Wonder trust that the procedure has been ended up and how many you believe you’ve processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require you require 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 Terrific here you’re at my YouTube channel we’re discussing something really important today the employee retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it until extremely just recently and learned a lot about it since this is most likely the most affordable expense of capital for any small company 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call your bank manager and state offer me a loan it doesn’t 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 have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to discover all 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 used services 3 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 distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund fine go on sorry I simply need to make sure we got that point I mean that’s a big distinction a loan versus cash money I like cash cash that’s what we’re speaking about alright 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 lovely hard check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned a business however it’s based upon you having W-2 staff members 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 need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 up to 5 thousand Max and then what happens 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 worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the big question is why does nobody understand about this because look when I initially found out about this when I first fulfilled Josh you understand I’ve got lots of investments in lots of companies I’m a major advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think it because I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we utilized them sensibly to survive throughout the pandemic so when I found out 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 know about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a bunch of individuals told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody understand about the worker retention credit you know what’s intriguing you’re talking about the banks Kevin since 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 process 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 chaos due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could 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 ever made it clear to any person about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this business and bottom line my company Kevin has actually stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge huge business customers have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker 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 approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is fully or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers despite size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is completely or partially suspended by federal 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. As soon as the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance generally offer proficiency and assistance to assist organizations navigate the intricate procedure of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? How Do You Claim The Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist determine if you fulfill the requirements for the credit and identify the maximum credit amount you can claim.
Paperwork and Calculation: ERC filing services will help in collecting the required documents, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can review your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the needed forms and paperwork on your behalf. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have evolved gradually. These business remain updated with the latest modifications and guarantee that your filings abide by the most present guidelines. If the Internal revenue service requests extra information or performs an audit related to your ERC claim, they can also provide ongoing support.
It’s important to research and veterinarian any company offering ERC filing support to ensure their trustworthiness and expertise. Try to find recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax specialists who provide ERC filing support.
Remember that while these business can supply important assistance, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage organizations to retain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, companies should meet one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As pointed out previously, for 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the 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 employer’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of certified wages paid to employees, including specific health insurance expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits 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 been retroactively broadened and boosted, permitting eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides an opportunity for services to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be reimbursed to the company if the credit goes beyond the amount of work taxes owed.
It is very important to note that the ERC arrangements and eligibility requirements have actually developed with time. The very best course of action is to speak with a tax professional or go to the official IRS site for the most up-to-date and in-depth details regarding the ERC, consisting of any current legal changes or updates.
To receive the ERC, a service needs to meet among the following requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and organizations that received a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC includes finishing the needed kinds and including the credit on your employment income tax return (normally Type 941). The exact time it requires to process the credit can differ based on several aspects, consisting of the intricacy of your organization and the workload of the IRS. It’s advised to consult with a tax professional for assistance particular to your scenario.
There are numerous companies that can help with the procedure of declaring the ERC. Some widely known business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon basic understanding and might not show the most current updates or changes to the ERC. It is very important to speak with a tax expert or visit the main internal revenue service site for the most up-to-date and precise information relating to eligibility, declaring treatments, and offered assistance.
Less than 100. If the employer had 100 or fewer staff members usually in 2019, then the credit is based.
on incomes paid to all employees whether they really worked or not. To put it simply, even if the.
workers worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply cash payments but also a part of the cost of company.
offered healthcare. How Do You Claim The Employee Retention Credit
Employers can be right away reimbursed for the credit by reducing the amount of payroll taxes they.