Lets talk first about How Do You Take The Employee Retention Credit :
Our team here what do these men doing everybody in this room is helping teach individuals about ERC and uh constantly supply a beautiful breakfast and have individuals truly learn about the program we must head to the room where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I indicate you understand if you simply begin 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 imply it’s just I mean think of 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 validated and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their savings account and they can really trust Wonder trust that the procedure has been completed and the number of you believe 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 plainly they know what they’re doing which’s what you require you require 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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which most of you have never ever heard of I certainly hadn’t become aware of it up until really just recently and learned a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call 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 tell all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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.
correct the money money payroll tax refund alright go on sorry I just need to make sure we got that point I indicate that’s a huge difference a loan versus cash money I like money 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it sounds like to me if it’s a if it’s employee retention credit that person had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have actually owned a business however it’s based on 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 very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the 6 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 have to be on the W-2 throughout that duration 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 six quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the turmoil 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 5 thousand Max and then what happens 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 6 thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be reduced 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 typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a restaurant 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 internal revenue service so it’s substantial certainly now the big concern is why does nobody learn about this due to the fact that look when I first heard about this when I first satisfied Josh you understand I have actually got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I do not believe it due to the fact that I utilize the PPP we went through the cash 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 should have and we utilized them wisely to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even called to my political leader friends Governor Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a lot of individuals informed 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 staff member retention credit you know what’s fascinating you’re talking about the banks Kevin due to the fact that 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 big banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was turmoil since keep in mind in the original cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has actually stayed in business considering that 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose service is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Accessibility.
1. The credit is offered to all companies no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing help generally provide knowledge and support to help organizations navigate the intricate process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? How Do You Take The Employee Retention Credit
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based on elements such as your industry, earnings, and operations. They can assist identify if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Documentation and Estimation: ERC filing services will help in collecting the required documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit amount based upon qualified incomes and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the necessary kinds and paperwork in your place. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually developed gradually. These business remain upgraded with the most recent changes and make sure that your filings comply with the most existing guidelines. They can likewise provide ongoing assistance if the internal revenue service demands additional details or carries out an audit related to your ERC claim.
It is essential to research and veterinarian any company using ERC filing help to ensure their credibility and expertise. Look for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who provide ERC filing assistance.
Bear in mind that while these companies can supply important help, it’s always a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to retain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, companies need to satisfy one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of qualified salaries paid to staff members, including particular health plan expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. The exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, permitting eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit exceeds the amount of work taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC provisions and eligibility requirements have actually progressed over time. The best course of action is to speak with a tax professional or visit the official IRS site for the most up-to-date and in-depth details relating to the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, a business must fulfill among the following criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and services that got a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves finishing the required kinds and consisting of the credit on your work tax return (usually Kind 941). The exact time it takes to process the credit can differ based upon numerous factors, consisting of the intricacy of your service and the workload of the IRS. It’s advised to seek advice from a tax professional for assistance specific to your situation.
There are several companies that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll provider. Some well-known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these companies straight to ask about their services and charges.
Please keep in mind that the info offered here is based upon basic knowledge and might not show the most recent updates or changes to the ERC. It is necessary to speak with a tax expert or visit the main internal revenue service site for the most current and accurate information regarding eligibility, claiming treatments, and readily available support.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on wages paid to all workers whether they in fact worked or not. Simply put, even if the.
workers 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 workers usually in 2019, then the credit is.
allowed only for wages paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply money payments but likewise a part of the expense of employer.
provided healthcare. How Do You Take The Employee Retention Credit
Payment.
Employers can be instantly repaid for the credit by lowering the amount of payroll taxes they.