Lets talk first about Reporting Employee Retention Credit On Tax Return :
Our group here what do these men doing everyone in this space is helping teach individuals about ERC and uh always provide a lovely breakfast and have individuals actually discover the program we need to head to the space where we are able to show a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I suggest you know if you just begin to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply 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 internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they don’t pay anything up until they really receive the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their savings account and they can truly rely on Wonder trust that the procedure has been completed and how many you think you have actually processed considering that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 Wonderful here you’re at my YouTube channel we’re speaking about something actually important today the staff member retention credit which the majority of you have never ever become aware of I certainly had not become aware of it till very recently and found out a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator 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 just call up your bank manager and state offer me a loan it doesn’t 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 become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to discover all about it let’s talk worker 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 used services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund okay go on sorry I just have to make sure we got that point I suggest that’s a huge distinction a loan versus money money I like cash cash that’s what we’re speaking 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 initial 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 speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you had to have actually owned a service however it’s based upon 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 qualified 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 correct so there were six quarters the program was open well stroll 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. okay so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the turmoil of the pandemic so they wished 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 then what happens 21 000 Max in 2021 oh that’s how you develop 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 great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city 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 IRS so it’s big undoubtedly now the big question is why does no one understand about this because appearance when I first heard about this when I first met Josh you understand I have actually got great deals of investments in lots of business I’m a major advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t believe it since I use 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 deserved and we utilized them carefully to survive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my political leader friends Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how false information is that there’s no details out there then a lot of individuals told me well you can’t get it since 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 intriguing you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted 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 turmoil due to the fact that remember in the original cares act you could not do both programs so if you had actually done PPP you might 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 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 done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big huge 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 property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
employer whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount 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 before December 31, 2020.
The definition of qualifying earnings differs by whether a company had, typically, basically than.
100 employees in 2019.
Business that focus on ERC filing help normally provide competence and assistance to help businesses browse the complex procedure of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Reporting Employee Retention Credit On Tax Return
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based upon factors such as your market, profits, and operations. If you meet the requirements for the credit and recognize the optimum credit quantity you can declare, they can help determine.
Documentation and Estimation: ERC filing services will assist in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based upon eligible wages and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend previous income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the necessary forms and documentation on your behalf. This consists of finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have evolved gradually. These business remain upgraded with the current changes and make sure that your filings abide by the most present standards. If the Internal revenue service demands additional details or conducts an audit related to your ERC claim, they can also provide ongoing assistance.
It is essential to research and veterinarian any business providing ERC filing help to guarantee their trustworthiness and know-how. Look for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who use ERC filing support.
Keep in mind that while these business can offer valuable support, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to keep and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, companies need to meet one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts 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 is equal to a portion (approximately 70%) of qualified incomes paid to workers, including certain health insurance costs. 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. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. The very same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting qualified employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Type 941. The excess can be refunded to the employer if the credit surpasses the quantity of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually progressed over time. The very best course of action is to speak with a tax professional or check out the official IRS site for the most up-to-date and detailed details concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, a business must meet among the following requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that got a PPP loan may have restrictions on claiming the credit.
The process for declaring the ERC includes finishing the necessary kinds and consisting of the credit on your work income tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon a number of factors, consisting of the complexity of your company and the workload of the internal revenue service. It’s advised to talk to a tax expert for assistance particular to your circumstance.
There are a number of business that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these business directly to ask about their services and costs.
Please note that the info supplied here is based upon general knowledge and may not reflect the most current updates or modifications to the ERC. It is essential to consult with a tax expert or check out the official internal revenue service site for the most updated and precise details concerning eligibility, declaring procedures, and available help.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on wages paid to all workers whether they really worked or not. To put it simply, even if the.
staff members worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply cash payments but likewise a portion of the expense of employer.
offered health care. Reporting Employee Retention Credit On Tax Return
Companies can be instantly reimbursed for the credit by decreasing the quantity of payroll taxes they.