Lets talk first about Is The Employee Retention Credit Retroactive :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh always supply a gorgeous breakfast and have individuals really discover the program we ought to head to the room where we are able to show some 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 literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I indicate you know if you simply start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I indicate think of how many actual customers that went through the program yeah this is the very end this is the party 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 have the ability 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 do not pay anything until they in fact receive the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their bank account and they can truly trust Wonder trust that the procedure has been finished and the number of you think you’ve processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require you require 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 important today the staff member retention credit which most of you have actually never heard of I certainly had not become aware of it up until extremely just recently and discovered a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have staff members in between five 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 largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call your bank manager and state provide 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 become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund alright go on sorry I simply need to ensure we got that point I suggest that’s a huge distinction a loan versus cash cash I like cash cash that’s what we’re speaking about 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 beautiful tough check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works since it sounds 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 workers right you needed to have actually owned a company however it’s based upon 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 very first six months of 2021 on the W-2 right 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 three of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part cash 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 worker’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the turmoil of the pandemic so they wanted to even get more to keep those workers 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 occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five 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 money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the huge question is why does no one understand about this since appearance when I first found out about this when I initially fulfilled Josh you know I have actually got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t think it since I use 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 deserved and we utilized them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my politician friends Governor Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no info out there then a lot of people informed 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 nobody learn about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin because in the PPP loan procedure 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 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 mayhem since keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this before unless you have an account that went into this business and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge business customers have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity 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 developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose service is totally or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 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 total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing support generally offer knowledge and support to assist companies browse the intricate process of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Is The Employee Retention Credit Retroactive
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can declare, they can assist determine.
Documents and Calculation: ERC filing services will help in gathering the necessary paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based upon qualified salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you change previous tax returns to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the essential types and documentation on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed gradually. These companies stay upgraded with the latest changes and make sure that your filings abide by the most existing standards. They can also offer ongoing support if the IRS demands extra info or carries out an audit related to your ERC claim.
It is very important to research and vet any business offering ERC filing assistance to guarantee their reliability and proficiency. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who offer ERC filing support.
Keep in mind that while these business can provide important support, it’s always a good concept to have a fundamental understanding of the ERC requirements and process 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. government as part of COVID-19 relief steps. The objective of the ERC is to motivate businesses to keep and pay their workers 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 employers, including for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies should meet one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. As mentioned earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline 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.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified salaries paid to workers, including certain health insurance expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. Nevertheless, the exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, enabling qualified companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to change prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Type 941. The excess can be refunded to the company if the credit exceeds the amount of work taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have evolved in time. The very best course of action is to consult with a tax expert or visit the main internal revenue service site for the most detailed and current information regarding the ERC, including any current legal changes or updates.
To receive the ERC, a company must fulfill one of the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease 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 right away preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC involves finishing the needed kinds and including the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can vary based on several aspects, consisting of the intricacy of your business and the work of the internal revenue service. It’s recommended to seek advice from a tax professional for assistance particular to your circumstance.
There are several business that can assist with the procedure of declaring the ERC. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based upon general understanding and might not show the most current updates or changes to the ERC. It is essential to consult with a tax professional or check out the main IRS site for the most updated and precise information relating to eligibility, claiming procedures, and offered help.
Less than 100. If the employer had 100 or fewer staff members usually in 2019, then the credit is based.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
workers worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments however likewise a part of the expense of employer.
provided healthcare. Is The Employee Retention Credit Retroactive
Payment.
Companies can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.