Lets talk first about Pros And Cons Of Employee Retention Credit :
Our team here what do these men doing everybody in this room is assisting teach individuals about ERC and uh always supply a stunning breakfast and have people actually learn about the program we ought to head to the space where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I imply you know if you just begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I suggest think of the number of real 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 validated 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 understand the check is gone for sure which’s when they pay so they do not pay anything up 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 method they deposit it into their bank account and they can truly rely on Wonder trust that the procedure has actually been finished and how many you think you have actually processed considering that you began 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 require you require experts 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 really crucial today the staff member retention credit which the majority of you have actually never ever become aware of I definitely hadn’t heard of it till extremely just recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply 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 inform us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big difference 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 alright go on sorry I just have to ensure we got that point I suggest that’s a big distinction a loan versus cash cash I like cash money that’s what we’re talking 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 stunning difficult check in the mail where you get actual cash from the IRS all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that individual needed to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have owned an organization but it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite 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 exact Kevin is 50 of the employee’s income to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus because 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 5 thousand Max and then what takes place 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 6 thousand dollars per employee that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be lowered 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 on average Kevin is if you took PPP cash somewhere 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 staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the big concern is why does no one learn about this since appearance when I first heard about this when I initially met Josh you understand I have actually got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make many lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I do not think it because 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 should have and we used them carefully to survive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody learn about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it extremely 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was mayhem because remember in the original cares act you could not do both programs so if you had 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 federal government never made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never ever 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 accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this service and bottom line my firm Kevin has been in business because 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
employer whose organization is completely or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Accessibility.
1. The credit is readily 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.
businesses 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 organization is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings differs by whether a company had, on average, basically than.
100 workers in 2019.
Business that focus on ERC filing support normally offer proficiency and assistance to assist services browse the complex process of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Pros And Cons Of Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your organization’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist identify.
Documents and Estimation: ERC filing services will assist in collecting the necessary documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit quantity based upon qualified earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to determine prospective opportunities for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the essential types and paperwork in your place. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have developed gradually. These business remain updated with the latest changes and guarantee that your filings adhere to the most present standards. If the IRS demands extra information or carries out an audit related to your ERC claim, they can also supply ongoing support.
It is essential to research study and vet any company using ERC filing support to ensure their trustworthiness and know-how. Search for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC filing assistance.
Bear in mind that while these companies can offer valuable help, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure accurate 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 businesses to retain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, companies should fulfill one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. As mentioned previously, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of qualified incomes paid to workers, including particular health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck 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 got a PPP loan. However, the exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, allowing eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for organizations to amend prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Form 941. The excess can be reimbursed to the company if the credit goes beyond the amount of work taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually developed in time. The best strategy is to speak with a tax expert or visit the official internal revenue service site for the most up-to-date and in-depth information relating to the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, a service needs to fulfill 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 substantial decrease in gross invoices. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and services that got a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes finishing the essential forms and consisting of the credit on your work tax return (normally Type 941). The exact time it takes to process the credit can differ based upon a number of elements, including the intricacy of your company and the workload of the IRS. It’s advised to seek advice from a tax expert for guidance particular to your scenario.
There are numerous business that can assist with the procedure of claiming the ERC. Some popular companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon general knowledge and might not show the most recent updates or changes to the ERC. It is necessary to talk to a tax expert or visit the main internal revenue service site for the most current and accurate info concerning eligibility, claiming treatments, and available assistance.
Less than 100. If the company had 100 or less employees typically in 2019, then the credit is based.
on salaries paid to all workers whether they actually worked or not. Simply put, even if the.
staff members worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “wages” consists of not simply money payments but also a portion of the cost of company.
provided health care. Pros And Cons Of Employee Retention Credit
Payment.
Employers can be immediately compensated for the credit by lowering the quantity of payroll taxes they.