Lets talk first about Refundable Portion Of Employee Retention Credit :
Our group here what do these men doing everyone in this space is assisting teach people about ERC and uh constantly provide a lovely breakfast and have individuals really learn more about the program we must head to the room 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 numerous millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I imply you understand if you simply begin to take a 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 suggest it’s just I imply think about the number of actual 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they do not pay anything till they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the process has been completed and how many you think you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require you require professionals 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 Terrific here you’re at my YouTube channel we’re speaking about something really important today the staff member retention credit which the majority of you have never become aware of I definitely had not heard of it until really just recently and discovered a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I have actually got the professional 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 just call up your bank supervisor and say 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 become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies three 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.
correct the money cash payroll tax refund fine go on sorry I just need to make sure we got that point I mean that’s a big difference a loan versus money cash I like money money that’s what we’re speaking about 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 beautiful difficult check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s staff member retention credit that individual had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for employees right you had to have owned an organization but it’s based on you having W-2 workers in America not 10.99. 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 first six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you return 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 worker’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the chaos of the pandemic so they wanted to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and then what takes place 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 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 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 say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the big question is why does no one understand about this due to the fact that look when I initially found out about this when I initially satisfied Josh you know I have actually got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many many investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I don’t believe it because 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 and that were well should have and we used them carefully to survive throughout the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even called to my politician buddies Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the worker retention credit you know what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure 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 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 chaos due to the fact that remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original 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 ever made it clear to anybody about how to.
do this does your CFO understand 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 some of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this organization and bottom line my firm Kevin has been in business considering that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big corporate customers have actually worked with bottom line to recover other federal 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 encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose business is fully 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.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying wages varies by whether a company had, on average, more or less than.
100 employees in 2019.
Business that focus on ERC filing assistance typically provide competence and support to help organizations navigate the intricate process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Refundable Portion Of Employee Retention Credit
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based upon elements such as your market, income, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can claim, they can assist determine.
Documentation and Computation: ERC filing services will help in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit amount based on eligible incomes and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to determine potential chances for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the necessary forms and documents in your place. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have developed gradually. These companies stay upgraded with the latest changes and ensure that your filings abide by the most present guidelines. They can also offer ongoing assistance if the IRS demands additional info or performs an audit related to your ERC claim.
It is necessary to research and vet any company offering ERC filing help to ensure their credibility and expertise. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who use ERC filing assistance.
Bear in mind that while these companies can supply valuable help, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee 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 measures. The goal of the ERC is to motivate services to retain and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies must meet one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of qualified wages paid to staff members, consisting of particular health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got 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 claim the ERC even if they got a PPP loan. The exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Form 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have actually evolved in time. The very best strategy is to talk to a tax expert or visit the main IRS website for the most comprehensive and up-to-date information relating to the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a business needs to satisfy one of the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt organizations, but there are some exceptions. For example, federal government entities and services that got a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC involves completing the required forms and consisting of the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can differ based on several factors, including the intricacy of your company and the work of the internal revenue service. It’s suggested to consult with a tax expert for assistance particular to your circumstance.
There are several business that can assist with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some widely known companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these business straight to ask about their costs and services.
Please keep in mind that the information supplied here is based on basic understanding and might not show the most recent updates or modifications to the ERC. It is essential to speak with a tax professional or go to the main internal revenue service website for the most precise and up-to-date details concerning eligibility, claiming procedures, and available help.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on incomes paid to all employees whether they in fact 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. If the company had more than 100 staff members on average in 2019, then the credit is.
permitted just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” includes not simply money payments however likewise a portion of the expense of company.
offered health care. Refundable Portion Of Employee Retention Credit
Companies can be right away compensated for the credit by lowering the quantity of payroll taxes they.