Lets talk first about Requirements Of Employee Retention Credit :
Our group here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly provide a lovely breakfast and have individuals actually find out about the program we need to head to the room where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I indicate you understand if you just begin to take a 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 mean it’s just I mean consider 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 validated the numbers are verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand 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 really get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the process has actually 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 six billion dollars wow so clearly they know what they’re doing which’s what you need 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually crucial today the worker retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it till very recently and discovered a lot about it due to the fact that this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert 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 difficult this isn’t like PPP we just call up your bank manager and state give me a loan it does not 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’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to learn everything about it let’s talk worker 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 provided services 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 huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund fine go on sorry I just need to ensure we got that point I imply that’s a huge distinction a loan versus cash money I like money money that’s what we’re discussing 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 gorgeous tough check in the mail where you get real cash from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have owned a company but it’s based on you having W-2 workers 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 qualified 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 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite 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 specific Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the chaos 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 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 because that’s a lot of money it is now there’s a caveat here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the huge concern is why does nobody know about this since look when I initially heard about this when I first met Josh you know I’ve got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of lots of financial 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 due to the fact that I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them sensibly to survive during the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even contacted us to my politician friends Guv Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a bunch 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 nobody learn about the staff member retention credit you understand what’s fascinating you’re talking 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 huge 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 just procedure process that’s all um and here there was turmoil because remember in the original cares act you might not do both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were not 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 any person about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it previously 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 business your accountant no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my firm Kevin has been in business since 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member 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 as much as $10,000 in salaries paid by an.
employer whose business is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Availability.
1. The credit is available to all employers regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
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 works for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, typically, basically than.
100 workers in 2019.
Companies that focus on ERC filing help usually provide expertise and support to help organizations browse the complex procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Requirements Of Employee Retention Credit
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based upon factors such as your industry, profits, and operations. They can help determine if you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim.
Documents and Calculation: ERC filing services will assist in collecting the required documents, such as payroll records and monetary statements, to support your claim. They will likewise help determine the credit amount based on qualified salaries and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to identify possible opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the essential forms and paperwork in your place. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have developed with time. These companies stay upgraded with the most recent modifications and ensure that your filings adhere to the most existing standards. They can also supply continuous assistance if the internal revenue service requests extra information or carries out an audit related to your ERC claim.
It’s important to research and vet any business using ERC filing help to ensure their credibility and competence. Look for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who provide ERC filing assistance.
Bear in mind that while these business can supply important help, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure accurate filings.
The Worker 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 keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit services, tax-exempt companies, and certain governmental entities. To certify, companies should meet one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out previously, for 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts compared to the 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 company’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of qualified incomes paid to staff members, consisting of certain health insurance expenditures. The maximum 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 an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. Nevertheless, the exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting eligible employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, usually Form 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of work taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually developed with time. The very best strategy is to seek advice from a tax professional or go to the official internal revenue service website for the most up-to-date and in-depth details concerning the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a service should meet among the following criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC involves finishing the needed kinds and consisting of the credit on your employment income tax return (normally Kind 941). The exact time it requires to process the credit can differ based upon a number of aspects, consisting of the intricacy of your company and the workload of the IRS. It’s suggested to consult with a tax professional for assistance particular to your circumstance.
There are numerous companies that can assist with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these companies straight to ask about their services and costs.
Please keep in mind that the details provided here is based upon general knowledge and may not show the most current updates or changes to the ERC. It is very important to talk to a tax expert or check out the official IRS website for the most precise and updated details relating to eligibility, claiming procedures, and available help.
Less than 100. If the employer had 100 or less employees typically in 2019, then the credit is based.
on salaries 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 company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
enabled just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just cash payments but likewise a portion of the expense of company.
supplied health care. Requirements Of Employee Retention Credit
Payment.
Employers can be immediately reimbursed for the credit by reducing the quantity of payroll taxes they.