Lets talk first about New Employee Retention Credit Rules :
Our group here what do these men doing everyone in this room is assisting teach people about ERC and uh constantly provide a gorgeous breakfast and have individuals truly learn 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 hundreds of countless dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I suggest you know if you just start 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 indicate it’s simply I indicate think about the number of real clients 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 consumer so that’s how you’re able to track it you know when you
get 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 method they transfer it into their bank account and they can really rely on Wonder trust that the process has actually been completed and the number of you believe you’ve processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need you need professionals 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 Terrific here you’re at my YouTube channel we’re talking about something actually important today the worker retention credit which most of you have actually never heard of I definitely hadn’t become aware of it up until extremely just recently and discovered a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees 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 Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just contact your bank manager and say give me a loan it doesn’t 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 have actually become yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund okay go on sorry I just have to make sure we got that point I mean that’s a big difference a loan versus money cash I like money 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s employee 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 people on the cap table not for investors it’s for workers right you needed to have owned a service however 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 very first six months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part cash just how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise 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 skyrocketed to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that take place um they simply changed 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 5 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 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 caveat here the PPP money would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the big question is why does no one learn about this since appearance when I first found out about this when I initially met Josh you understand I’ve got lots of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many many investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I don’t believe it since I utilize the PPP we went through the cash 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 should have and we used them carefully to survive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my politician buddies 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 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 no one understand about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you wanted 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 turmoil because keep in mind in the original cares act you could not do both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my firm Kevin has actually 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 big business customers have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, employer whose service is fully or partly suspended.
decline by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are 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 qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing support usually supply expertise and assistance to assist companies browse the intricate procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? New Employee Retention Credit Rules
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based on factors such as your industry, earnings, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare, they can assist figure out.
Paperwork 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 also help determine the credit quantity based upon eligible earnings and other certifying 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 identify possible chances for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the needed kinds and documents in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have developed gradually. These business remain upgraded with the current changes and make sure that your filings abide by the most current guidelines. If the Internal revenue service requests extra info or carries out an audit associated to your ERC claim, they can also supply ongoing assistance.
It’s important to research and veterinarian any business using ERC filing support to guarantee their credibility and knowledge. Try to find established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC submitting assistance.
Remember that while these companies can offer valuable assistance, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to retain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, companies must fulfill one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts 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 is equal to a portion (approximately 70%) of certified wages paid to workers, consisting of certain health insurance costs. The optimum 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 received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. However, the very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, enabling eligible employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to amend prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, usually Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is necessary to note that the ERC arrangements and eligibility criteria have progressed gradually. The best strategy is to seek advice from a tax professional or visit the official internal revenue service site for the most up-to-date and detailed details relating to the ERC, including any current legal modifications or updates.
To receive the ERC, a service should satisfy one of the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts 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 organizations that got a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC includes completing the essential kinds and including the credit on your employment tax return (generally Type 941). The exact time it requires to process the credit can differ based on several elements, consisting of the intricacy of your company and the workload of the internal revenue service. It’s recommended to talk to a tax professional for assistance specific to your situation.
There are numerous companies that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some well-known business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these companies directly to inquire about their services and charges.
Please note that the info provided here is based upon general understanding and might not reflect the most recent updates or modifications to the ERC. It is essential to seek advice from a tax expert or check out the official internal revenue service site for the most precise and current information regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. If the employer had 100 or less staff members on average in 2019, then the credit is based.
on salaries paid to all workers whether they actually worked or not. To put it simply, even if the.
workers worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
permitted only for salaries paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however likewise a part of the cost of company.
supplied healthcare. New Employee Retention Credit Rules
Employers can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.