Lets talk first about Irs Audit Employee Retention Credit :
Our group here what do these guys doing everybody in this space is helping teach people about ERC and uh constantly provide a gorgeous breakfast and have individuals actually discover 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 actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I mean you know 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 mean it’s just I mean consider the number of real customers 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 validated 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 know the check is gone for sure which’s when they pay so they do not pay anything up until they really get the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the process has been ended up and how many you think you’ve processed since 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 and that’s what you need you need experts 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 Fantastic here you’re at my YouTube channel we’re speaking about something truly essential today the staff member retention credit which most of you have never heard of I definitely hadn’t become aware of it till really just recently and discovered a lot about it due to the fact that this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers 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 difficult this isn’t like PPP we simply phone your bank manager and say provide 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 representative for this I like this program it’s disappearing soon you got to discover all about it let’s talk staff member 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 offered organizations 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I simply need to ensure we got that point I mean that’s a huge difference a loan versus money cash I like cash cash that’s what we’re speaking about fine 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 beautiful hard 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 worker retention credit that individual had to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you needed to have owned an organization however it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 staff members 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 first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part money just how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the chaos of the pandemic so they wished 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 five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of money it is now there’s a caution here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York 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 IRS so it’s huge undoubtedly now the big question is why does no one learn about this due to the fact that appearance when I initially became aware of this when I first satisfied Josh you understand I have actually got lots of investments in lots of business I’m a significant advocate for entrepreneurship in America and make lots of many financial investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t believe it because 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 deserved and we used them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a lot of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that 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 nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was chaos since remember in the original cares act you could refrain from doing both programs so if you had done PPP you could not do ERC in the original 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 any person about how to.
do this does your CFO know 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 accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually been in business since 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, employer whose organization is fully or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a similar 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 certifying salaries paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that focus on ERC filing assistance normally supply proficiency and support to help businesses browse the intricate process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Irs Audit Employee Retention Credit
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist identify if you meet the requirements for the credit and determine the optimum credit amount you can declare.
Documentation and Estimation: ERC filing services will assist in gathering the needed documents, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based upon eligible incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the needed types and documents in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have progressed gradually. These business stay upgraded with the latest changes and guarantee that your filings adhere to the most present guidelines. If the Internal revenue service requests extra info or carries out an audit related to your ERC claim, they can also offer ongoing assistance.
It’s important to research and vet any company using ERC filing assistance to ensure their reliability and proficiency. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Remember that while these business can offer valuable help, it’s always a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to retain 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 available to qualified employers, including for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, companies need to fulfill one of two criteria:.
Business operations were fully or partially suspended due to a federal 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 significant decrease is defined 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 company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified salaries paid to staff members, including specific health insurance costs. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. The very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, permitting eligible companies to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Type 941. The excess can be reimbursed to the company if the credit surpasses the quantity of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have developed in time. The best strategy is to consult with a tax professional or go to the official IRS website for the most current and detailed information relating to the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a service must fulfill one of the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline 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 services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that received a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the needed types and consisting of the credit on your employment tax return (normally Form 941). The exact time it requires to process the credit can vary based on several elements, including the complexity of your organization and the work of the internal revenue service. It’s advised to seek advice from a tax expert for assistance particular to your scenario.
There are numerous business that can aid with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some popular business that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and get in touch with these companies directly to ask about their costs and services.
Please note that the information supplied here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It’s important to speak with a tax professional or visit the main IRS site for the most accurate and updated details concerning eligibility, claiming procedures, and available assistance.
Less than 100. If the employer had 100 or fewer staff members on average in 2019, then the credit is based.
on salaries paid to all employees whether they in fact worked or not. Simply put, 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 company had more than 100 employees on average in 2019.
enabled only for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but also a part of the cost of company.
offered health care. Irs Audit Employee Retention Credit
Payment.
Companies can be instantly repaid for the credit by lowering the amount of payroll taxes they.