Lets talk first about Justworks Employee Retention Credit :
Our group here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh always offer a beautiful breakfast and have people really find out about the program we must head to the room where we are able to display some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you know if you simply start 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 indicate 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 validated the numbers are confirmed 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 understand when you
receive this you know the check is gone for sure and that’s when they pay so they do not pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their bank account and they can genuinely rely on Wonder trust that the process has actually been completed and how many you believe you have actually processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’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 essential today the employee retention credit which most of you have never ever heard of I certainly had not become aware of it up until very recently and discovered a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have staff members in between 5 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 Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact 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 tell all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed 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 nearly 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 cash cash payroll tax refund alright go on sorry I simply have to make sure we got that point I imply that’s a huge distinction a loan versus cash cash I like cash cash that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s worker retention credit that person had to be a staff member so I’m going to make the Presumption 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 actually owned an organization but it’s based upon you having W-2 employees 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 first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part money how much can you get back per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’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 turmoil 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 approximately five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 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 money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically 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 City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the huge concern is why does nobody know about this because appearance when I initially became aware of this when I first fulfilled Josh you know I’ve got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make many 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 do not believe it due to the fact that I use the PPP we went through the cash 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 carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my politician good friends Governor Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of individuals told 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 learn about the staff member retention credit you know what’s intriguing you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very 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 just process process that’s all um and here there was mayhem because remember in the original cares act you might 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 not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever 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 company 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 stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have actually worked with bottom line to recuperate other government programs we have actually 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 federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose organization is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the company needs to satisfy 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.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes differs by whether a company had, typically, basically than.
100 staff members in 2019.
Business that focus on ERC filing help normally offer proficiency and assistance to help companies navigate the intricate procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Justworks Employee Retention Credit
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based on elements such as your industry, revenue, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist figure out.
Documentation and Calculation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also help determine the credit amount based upon qualified wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can review your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the needed types and documentation in your place. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have developed gradually. These companies stay upgraded with the most recent changes and ensure that your filings adhere to the most existing standards. If the Internal revenue service requests extra information or conducts an audit associated to your ERC claim, they can likewise offer continuous support.
It is essential to research and veterinarian any company using ERC filing support to guarantee their credibility and competence. Try to find recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax experts who offer ERC filing assistance.
Keep in mind that while these business can provide valuable support, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate companies to retain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, employers need to fulfill one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of qualified wages paid to staff members, including specific health insurance expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. The same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, permitting eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for services to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, typically Form 941. If the credit goes beyond the amount of employment taxes owed, the excess can be refunded to the employer.
It is essential to note that the ERC provisions and eligibility requirements have actually evolved gradually. The best strategy is to speak with a tax expert or check out the main internal revenue service site for the most current and detailed info regarding the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, an organization must fulfill one of the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a considerable decline is specified 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 receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and services that got a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC involves finishing the needed forms and including the credit on your employment tax return (generally Kind 941). The exact time it takes to process the credit can vary 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 speak with a tax expert for assistance specific to your circumstance.
There are a number of companies that can help with the process of claiming 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 a good idea to research study and get in touch with these business directly to ask about their services and charges.
Please keep in mind that the info provided here is based on general understanding and might not reflect the most current updates or changes to the ERC. It is necessary to talk to a tax professional or check out the official internal revenue service site for the most current and accurate information relating to eligibility, declaring treatments, and available assistance.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on salaries paid to all staff members whether they really 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 on average in 2019, then the credit is.
enabled just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but also a part of the cost of company.
supplied health care. Justworks Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.