Lets talk first about Labor Association Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh always supply a beautiful breakfast and have individuals actually learn more about the program we need to head to the room where we are able to display a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually 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 mean you know if you simply start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I indicate 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 confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure which’s when they pay so they do not pay anything till they actually receive the cash 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 bank account and they can really trust Wonder trust that the process has actually been ended up and the number of you think you have actually processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know 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 among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re speaking about something really essential today the employee retention credit which most of you have actually never become aware of I definitely had not heard of it till extremely just recently and learned a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the expert 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 challenging this isn’t like PPP we simply phone your bank supervisor and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us 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 very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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.
correct the cash cash payroll tax refund alright go on sorry I simply have to ensure we got that point I suggest that’s a huge distinction a loan versus cash cash I like money cash that’s what we’re discussing 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 gorgeous tough check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual had 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 shareholders it’s for staff members right you had to have actually owned an organization but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 correct so there were six 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 need to be on the W-2 during that period now let’s talk my favorite part money how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the turmoil 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 as much as five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of cash 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 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 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 employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the huge question is why does no one know about this due to the fact that look when I first heard about this when I initially met Josh you understand I have actually got great deals of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of 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 and that were well should have and we used them carefully to stay alive during the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t learn about it I imply that’s how you know that’s how false information is that there’s no info out there then a bunch of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s fascinating you’re speaking about the banks Kevin because 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 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 turmoil because 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 not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never 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 done it previously 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 accounting professional’s never done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have actually 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 property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose company is completely or partially suspended.
decrease by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether a company had, usually, basically than.
100 staff members in 2019.
Business that focus on ERC filing support normally provide proficiency and support to assist organizations navigate the intricate procedure of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Labor Association Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based on elements such as your market, earnings, and operations. If you satisfy the requirements for the credit and identify the maximum credit amount you can claim, they can help identify.
Documents and Calculation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit amount based upon eligible incomes and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can examine your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the required kinds and documents on your behalf. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have developed with time. These companies stay updated with the current modifications and make sure that your filings abide by the most existing guidelines. They can likewise offer ongoing support if the internal revenue service requests extra information or carries out an audit related to your ERC claim.
It is essential to research study and veterinarian any company using ERC filing assistance to guarantee their trustworthiness and competence. Search for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who use ERC filing support.
Keep in mind that while these companies can offer valuable support, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure 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 procedures. The goal of the ERC is to encourage services to maintain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, companies need to meet one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified salaries paid to workers, consisting of specific health plan expenses. 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: At first, organizations that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. However, the very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting eligible companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to modify prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC provisions and eligibility criteria have developed over time. The very best strategy is to speak with a tax professional or check out the main IRS site for the most in-depth and current information relating to the ERC, including any recent legal changes or updates.
To get approved for the ERC, a service must fulfill one of the following criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, government entities and companies that received a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the necessary types and including the credit on your work income tax return (normally Form 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to seek advice from a tax expert for guidance particular to your situation.
There are several companies that can assist with the process of declaring the ERC. Some widely known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon basic knowledge and may not show the most current updates or modifications to the ERC. It is very important to speak with a tax expert or go to the main internal revenue service website for the most accurate and updated details concerning eligibility, claiming treatments, and offered assistance.
Less than 100. If the company had 100 or fewer workers on average in 2019, then the credit is based.
on wages paid to all employees whether they really 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. If the company had more than 100 staff members usually in 2019, then the credit is.
allowed only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments however also a part of the cost of employer.
provided health care. Labor Association Employee Retention Credit
Companies can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.