Lets talk first about How To Calculate The Employee Retention Credit :
Our group here what do these men doing everybody in this room is assisting teach people about ERC and uh constantly supply a lovely breakfast and have people truly discover the program we need to head to the space where we have the ability to show a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest 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 imply it’s simply 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 validated 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’re able to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything until they in fact get the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the process has been finished and how many you believe you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you need 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 Fantastic here you’re at my YouTube channel we’re talking about something really crucial today the worker retention credit which most of you have never heard of I definitely had not become aware of it up until really recently and found out a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist 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 difficult this isn’t like PPP we just call your bank supervisor and say give me a loan it does not work there’s not a loan it’s an application and Josh is going to inform 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 enjoy this program it’s going away 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 came up with the cares Act and the cares act used companies 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 difference 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 just need to ensure we got that point I mean that’s a huge distinction a loan versus money money I like cash cash that’s what we’re talking about all right 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 tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have owned a company however it’s based upon you having W-2 workers in America not 10.99. 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 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 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite 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 precise Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished 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 occurs 21 000 Max in 2021 oh that’s how you create twenty 6 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 money it is now there’s a caveat here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually 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 workers 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 huge question is why does no one understand about this because appearance when I first became aware of this when I first satisfied Josh you know I have actually got great deals of investments in lots of companies I’m a major advocate for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I don’t think it because I utilize the PPP we went through the money 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 wisely to survive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t know about it I suggest that’s how you know that’s how false information is that there’s no information out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it really 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was chaos since keep in mind in the initial cares act you could 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 anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has been in business because 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member 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 service is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying wages differs by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing help typically supply proficiency and support to assist services browse the complicated process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? How To Calculate The Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on elements such as your market, revenue, and operations. They can help identify if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Documentation and Estimation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based on qualified wages and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can evaluate your previous payroll records and financials to determine prospective chances for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the needed forms and paperwork in your place. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have evolved with time. These business remain updated with the latest modifications and make sure that your filings comply with the most present standards. If the Internal revenue service requests additional information or conducts an audit associated to your ERC claim, they can likewise supply continuous support.
It’s important to research and vet any company providing ERC filing help to guarantee their credibility and proficiency. Search for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who use ERC submitting support.
Bear in mind that while these companies can offer important support, it’s constantly an excellent concept to have a standard 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 presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate organizations to maintain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, employers should satisfy one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. As discussed earlier, for 2021, a substantial decline 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% 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.
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 portion (up to 70%) of qualified incomes paid to staff members, consisting of particular health plan expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. Nevertheless, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses 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, generally Form 941. The excess can be refunded to the company if the credit goes beyond the quantity of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have actually progressed over time. The best course of action is to talk to a tax professional or go to the official IRS website for the most up-to-date and detailed information regarding the ERC, including any current legislative changes or updates.
To get approved for the ERC, a company should fulfill among the following criteria:.
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 receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the very 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 organizations, however there are some exceptions. Government entities and services that got a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC involves finishing the essential types and including the credit on your work tax return (generally Type 941). The exact time it takes to process the credit can differ based upon several aspects, consisting of the intricacy of your business and the workload of the internal revenue service. It’s suggested to talk to a tax expert for guidance specific to your scenario.
There are numerous business that can assist with the process of claiming the ERC. Some popular business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on general understanding and might not show the most recent updates or modifications to the ERC. It is necessary to speak with a tax expert or check out the official IRS site for the most up-to-date and accurate details concerning eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on earnings paid to all workers whether they in fact worked or not. Simply put, even if the.
employees worked full time and got paid 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.
permitted just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but also a part of the expense of company.
provided health care. How To Calculate The Employee Retention Credit
Employers can be immediately reimbursed for the credit by reducing the quantity of payroll taxes they.