Lets talk first about Irs Employee Retention Credit Faq :
Our team here what do these guys doing everyone in this space is assisting teach people about ERC and uh always supply a lovely breakfast and have people truly find out about the program we need to head to the room where we have the ability to show 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 millions of dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I suggest you understand if you simply begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean think about how many real customers that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything until they in fact receive the money they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their savings account and they can genuinely rely on Wonder trust that the process has been finished and the number of you think you’ve processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’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 discussing something truly important today the staff member retention credit which the majority of you have actually never become aware of I certainly hadn’t heard of it up until really recently and found out a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call your bank supervisor and state offer 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’ve become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund all right go on sorry I just need to make certain we got that point I indicate that’s a huge distinction a loan versus money cash I like money cash that’s what we’re talking 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 real cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s worker retention credit that individual needed to be a worker 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 employees right you needed to have owned a business but it’s based upon you having W-2 staff members 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 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part money just how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that the chaos 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 after that 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 staff member that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be lowered 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 usually Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant 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 clearly now the huge concern is why does nobody understand about this due to the fact that look when I initially found out about this when I initially met Josh you understand I’ve got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make many lots of financial investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I don’t believe it due to the fact that I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them sensibly to stay alive during the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re discussing the banks Kevin because 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 big 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 simply procedure process that’s all um and here there was mayhem because remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC since 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 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 companies yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses 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 business is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing help usually provide proficiency and support to help companies navigate the complex process of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? Irs Employee Retention Credit Faq
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based upon factors such as your industry, income, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can assist figure out.
Documents and Estimation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit amount based upon qualified earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can examine your past payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the necessary forms and documentation on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually evolved over time. These business remain upgraded with the current changes and guarantee that your filings adhere to the most existing standards. If the Internal revenue service requests additional information or conducts an audit associated to your ERC claim, they can likewise offer continuous support.
It’s important to research and vet any business providing ERC filing support to ensure their reliability and competence. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC submitting support.
Keep in mind that while these companies can provide valuable help, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced 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 workers throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies need to fulfill one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As pointed out earlier, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices 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 quantity is equal to a percentage (approximately 70%) of certified salaries paid to workers, including particular health insurance costs. 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, services that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. Nevertheless, the very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, permitting eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for organizations to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Type 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually developed with time. The very best course of action is to seek advice from a tax expert or visit the main IRS site for the most up-to-date and comprehensive details relating to the ERC, including any current legal changes or updates.
To receive the ERC, an organization must fulfill among the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that got a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves finishing the essential types and including the credit on your employment income tax return (normally Type 941). The exact time it takes to process the credit can vary based on numerous aspects, including the intricacy of your business and the workload of the internal revenue service. It’s recommended to talk to a tax professional for guidance specific to your circumstance.
There are a number of business that can assist with the process of declaring the ERC. Some well-known business that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on basic knowledge and may not reflect the most recent updates or modifications to the ERC. It is very important to seek advice from a tax professional or check out the main IRS website for the most current and accurate details regarding eligibility, claiming treatments, and offered help.
Less than 100. If the company had 100 or less employees typically in 2019, then the credit is based.
on wages paid to all workers whether they really worked or not. Simply put, even if the.
employees worked full-time and earned 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 only for wages paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments however also a part of the expense of company.
offered health care. Irs Employee Retention Credit Faq
Employers can be right away compensated for the credit by minimizing the quantity of payroll taxes they.