Lets talk first about How To Calculate Qualified Wages For The Employee Retention Credit :
Our group here what do these men doing everybody in this room is assisting teach individuals about ERC and uh always provide a stunning breakfast and have individuals truly learn about the program we must head to the space where we are able to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I mean you understand if you simply start to take a 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 imply it’s simply I mean think of 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 verified and the check is on the mail in the mail from the IRS 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 gone for sure and that’s when they pay so they don’t pay anything until they actually receive the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their checking account and they can really trust Wonder trust that the process has actually been completed and how many you think you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’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 Fantastic here you’re at my YouTube channel we’re speaking about something truly crucial today the staff member retention credit which the majority of you have actually never become aware of I definitely hadn’t heard of it till really recently and learned a lot about it because this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply phone 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 inform all of us 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 going away soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I simply have to ensure we got that point I suggest that’s a huge distinction a loan versus money money I like cash cash 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 original cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get real cash from the IRS all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed to be an employee so I’m going to make the Assumption 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 an organization but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members 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 very first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’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 staff member’s salary to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus since the chaos 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 as much as 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of money it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around ten thousand dollars an individual 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 money you would still get a million dollar in the mail from the IRS so it’s big clearly now the huge concern is why does no one understand about this because look when I first heard about this when I first met Josh you know I have actually got lots of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it since 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 and that were well should have and we utilized them carefully to stay alive during the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my politician buddies Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information 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 also not real so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s intriguing you’re talking about the banks Kevin because in the PPP loan process the federal government made it extremely clear that if you desired 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 simply process procedure that’s all um and here there was turmoil because remember 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 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 government never made it clear to anyone about how to.
do this does your CFO know how to do this not really she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business because 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 lot of our big huge corporate customers have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose company is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Accessibility.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether an employer had, usually, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing help generally provide competence and assistance to help organizations browse the complicated procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? How To Calculate Qualified Wages For The Employee Retention Credit
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based on elements such as your market, profits, and operations. They can help figure out if you satisfy the requirements for the credit and identify the optimum credit amount you can declare.
Documentation and Calculation: ERC filing services will assist in collecting the essential documents, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit quantity based on qualified salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Support: Business concentrating on ERC filings will prepare and submit the essential forms and documentation on your behalf. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually developed over time. These companies remain upgraded with the latest modifications and ensure that your filings adhere to the most existing guidelines. If the IRS requests additional info or performs an audit associated to your ERC claim, they can also provide continuous support.
It is essential to research and vet any business offering ERC filing assistance to ensure their trustworthiness and knowledge. Search for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who use ERC filing support.
Keep in mind that while these companies can supply important assistance, it’s always an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate services to maintain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, companies need to fulfill one of two requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease 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 right away 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 portion (approximately 70%) of qualified salaries paid to employees, including certain health insurance 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, businesses that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. Nevertheless, the same salaries can not be utilized to claim 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 provision provides a chance for companies to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, generally Kind 941. The excess can be refunded to the employer if the credit goes beyond the amount of employment taxes owed.
It’s important to note that the ERC arrangements and eligibility criteria have actually progressed gradually. The best course of action is to seek advice from a tax expert or visit the main internal revenue service site for the most in-depth and up-to-date info regarding the ERC, consisting of any current legal changes or updates.
To receive the ERC, a business needs to satisfy one of the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline 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 immediately preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and businesses that got a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC includes completing the essential types and including the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can differ based on a number of factors, consisting of the complexity of your organization and the workload of the internal revenue service. It’s recommended to consult with a tax professional for assistance particular to your scenario.
There are a number of business that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these business straight to inquire about their services and charges.
Please note that the info offered here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax expert or check out the official internal revenue service site for the most up-to-date and precise info regarding eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on wages paid to all workers whether they really worked or not. In other words, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
enabled only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments however also a part of the expense of employer.
provided healthcare. How To Calculate Qualified Wages For The Employee Retention Credit
Payment.
Employers can be right away compensated for the credit by minimizing the amount of payroll taxes they.