Lets talk first about How The Employee Retention Credit Works :
Our team here what do these guys doing everybody in this room is helping teach people about ERC and uh constantly supply a stunning breakfast and have people really learn about the program we ought to head to the room where we are able 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 numerous 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 simply begin to look at some 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 just I indicate think about how many real 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 IRS heading to the consumer so that’s how you have the ability to track it you understand 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 get the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their bank account and they can truly trust Wonder trust that the procedure has actually been completed and how many you believe you’ve processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require 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 talking about something truly crucial today the employee retention credit which the majority of you have never heard of I definitely had not heard of it till really just recently and learned a lot about it since this is probably the lowest expense 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 Ideas they’re the largest 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 manager and say give me a loan it does not 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’ve become yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to learn 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 came up with the cares Act and the cares act used organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I just have to make sure we got that point I mean that’s a big difference a loan versus money money I like money money that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Presumption 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 actually owned a service however it’s based on you having W-2 workers 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 qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 appropriate 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 two and three of 2021. okay so that’s how it’s determined you need 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 employee that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus because the turmoil of the pandemic so they wanted to even get more to keep those staff members 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 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 cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city 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 internal revenue service so it’s big undoubtedly now the big concern is why does no one know about this since appearance when I initially became aware of this when I first satisfied Josh you understand I’ve got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not think it because 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 and that were well deserved and we used them carefully to stay alive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader good friends Governor Senators they didn’t know about it I suggest that’s how you understand that’s how misinformation is that there’s no information out there then a bunch of people informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody know about the staff member retention credit you know what’s fascinating you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you desired 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 could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered 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 anybody about how to.
do this does your CFO know how to do this not actually 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 business yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this service and bottom line my company Kevin has been in business since 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have dealt with bottom line to recuperate other government programs we’ve 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 government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing help usually provide know-how and support to assist companies browse the complex process of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? How The Employee Retention Credit Works
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based on factors such as your market, income, and operations. If you fulfill the requirements for the credit and identify the maximum credit quantity you can claim, they can assist determine.
Paperwork and Estimation: ERC filing services will help in gathering the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit amount based on eligible wages and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to identify possible chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the required types and documents on your behalf. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually progressed gradually. These business remain upgraded with the latest changes and make sure that your filings comply with the most existing 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 is very important to research and veterinarian any business using ERC filing help to guarantee their credibility and proficiency. Search for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who provide ERC filing support.
Bear in mind that while these business can supply important assistance, it’s always a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure accurate 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 services to keep and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, companies should fulfill one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As pointed out earlier, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable 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 immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of certified wages paid to employees, consisting of certain health plan expenditures. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. However, the very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling qualified employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Form 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC provisions and eligibility requirements have evolved in time. The best course of action is to consult with a tax expert or check out the main IRS website for the most up-to-date and comprehensive details concerning the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a service needs to satisfy one of the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and businesses that received a PPP loan may have restrictions on claiming the credit.
The procedure for claiming the ERC includes finishing the essential types and including the credit on your work tax return (usually Kind 941). The exact time it takes to process the credit can vary based on a number of elements, including the intricacy of your company and the work of the IRS. It’s suggested to seek advice from a tax expert for guidance specific to your scenario.
There are several companies that can help with the process of declaring the ERC. Some well-known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based on general understanding and may not show the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or visit the official internal revenue service site for the most precise and up-to-date details concerning eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on wages paid to all employees whether they in fact worked or not. To put it simply, even if the.
workers worked full time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed just for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not just money payments however also a part of the expense of company.
offered health care. How The Employee Retention Credit Works
Employers can be right away compensated for the credit by minimizing the amount of payroll taxes they.