Lets talk first about Qualifying For Employee Retention Credit :
Our team here what do these guys doing everyone in this room is helping teach people about ERC and uh always provide a stunning breakfast and have people really discover the program we should head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I imply you understand if you just start to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean think of the number of actual customers that went through the program yeah this is the very end this is the party 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 customer so that’s how you have the ability to track it you know when you
get this you know the check is chosen sure and that’s when they pay so they do not pay anything till they actually get the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their savings 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 given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand 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 one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re discussing something really crucial today the staff member retention credit which most of you have actually never ever heard of I certainly had not heard of it till very recently and learned a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank manager and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all 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 disappearing very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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.
fix the money cash payroll tax refund alright go on sorry I simply have to make certain we got that point I mean that’s a big distinction a loan versus money cash I like cash money that’s what we’re talking about alright 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 lovely difficult check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that person had to be an employee 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 actually owned an organization but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 employees 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 six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money how much can you return per worker that was on a W-2 in those 6 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 employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of seven thousand per quarter how did that occur um they just changed 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 up to 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment 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 IRS so it’s huge obviously now the big question is why does nobody understand about this because look when I first became aware of this when I initially fulfilled Josh you understand I’ve got great deals of investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous lots of investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I don’t think it since I utilize 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 been worthy of and we utilized them wisely to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader buddies Governor Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no information 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 real so let’s ask Josh why does nobody learn about the staff member retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 simply process procedure that’s all um and here there was mayhem due to the fact that keep in mind 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 altered 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 made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it before 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 accountant’s never ever done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have actually dealt with bottom line to recuperate other government programs we have actually 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 created to motivate.
companies to keep staff members 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 invoices, company whose service is totally or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partly 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. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings differs by whether an employer had, on average, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing help usually provide know-how and assistance to help organizations navigate the intricate procedure of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Qualifying For Employee Retention Credit
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based on factors such as your market, profits, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can claim, they can help figure out.
Documents and Computation: ERC filing services will assist in collecting the required documents, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit amount based on eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the required forms and documentation in your place. This consists of finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have progressed in time. These business remain upgraded with the most recent changes and guarantee that your filings abide by the most present standards. They can also provide continuous support if the IRS demands extra details or conducts an audit related to your ERC claim.
It is essential to research and veterinarian any business using ERC filing support to ensure their trustworthiness and expertise. Try to find established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who offer ERC filing assistance.
Keep in mind that while these companies can provide valuable help, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage services 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, consisting of for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, companies should meet one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As pointed out earlier, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the exact 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 amount amounts to a percentage (up to 70%) of certified earnings paid to staff members, consisting of particular 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 eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. However, the very same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, allowing qualified companies to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the amount of employment taxes owed.
It is essential to note that the ERC provisions and eligibility criteria have progressed in time. The best strategy is to talk to a tax professional or go to the official IRS site for the most comprehensive and up-to-date information concerning the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a service must fulfill among the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable 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 considerable decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC includes completing the necessary kinds and including the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can vary based on numerous elements, consisting of the complexity of your service and the work of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your scenario.
There are a number of business that can help with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to inquire about their costs and services.
Please keep in mind that the info supplied here is based on general understanding and might not show the most recent updates or changes to the ERC. It is very important to seek advice from a tax expert or check out the main internal revenue service site for the most updated and precise information concerning eligibility, claiming procedures, and offered help.
Less than 100. If the company had 100 or less employees usually in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. In other words, even if the.
workers worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however likewise a part of the expense of employer.
offered health care. Qualifying For Employee Retention Credit
Companies can be right away compensated for the credit by decreasing the amount of payroll taxes they.