Lets talk first about What Are Qualified Wages For The Employee Retention Credit :
Our team here what do these men doing everybody in this space is helping teach people about ERC and uh always offer a beautiful breakfast and have people actually discover the program we ought to head to the space where we are able to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I indicate you know if you simply start to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate think about 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything until they actually 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 transfer it into their savings account and they can truly rely on Wonder trust that the process has actually been completed and the number of you believe 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 understand what they’re doing and that’s what you need 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 speaking about something really essential today the staff member retention credit which most of you have never heard of I certainly had not heard of it up until very recently and learned a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest 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 manager and say provide 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’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to discover everything 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 used 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 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 money money payroll tax refund alright go on sorry I simply have to make sure we got that point I indicate that’s a huge difference a loan versus cash cash I like cash cash that’s what we’re discussing 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 beautiful tough check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s employee 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 investors it’s for workers right you had to have owned a business 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 qualified so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 proper so there were 6 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 two and 3 of 2021. okay 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 how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the chaos 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 five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 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 lot of money it is now there’s a caveat here the PPP cash would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge clearly now the huge question is why does no one understand about this since look when I initially became aware of this when I first fulfilled Josh you know I’ve got great deals of investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about 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 very easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them sensibly to stay alive 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 politician pals Guv Senators they didn’t understand about it I indicate that’s how you understand that’s how misinformation is that there’s no info 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 no one know about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it extremely 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 just process process that’s all um and here there was mayhem since remember in the original cares act you might 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 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 federal government never made it clear to anyone about how to.
do this does your CFO know how to do this not truly she or he’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accountant’s never done this before unless you have an account that went into this business and bottom line my company Kevin has actually been in business because 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 big big corporate customers have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work chance 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.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose company is totally or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing help typically provide expertise and support to assist companies browse the complicated process of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? What Are Qualified Wages For The Employee Retention Credit
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based on factors such as your market, profits, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can declare, they can assist determine.
Paperwork and Computation: ERC filing services will assist in collecting the required documentation, such as payroll records and monetary statements, to support your claim. They will likewise help calculate the credit quantity based on eligible wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the required types and paperwork on your behalf. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved gradually. These companies remain upgraded with the latest changes and guarantee that your filings abide by the most current standards. They can likewise provide ongoing support if the internal revenue service demands extra information or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any company using ERC filing assistance to guarantee their trustworthiness and know-how. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC filing assistance.
Bear in mind that while these business can provide valuable help, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure precise 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 goal of the ERC is to motivate businesses to maintain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit services, tax-exempt organizations, and specific governmental entities. To certify, employers must meet one of two criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified wages paid to employees, including particular health plan expenses. 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. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. Nevertheless, the same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for services to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Type 941. If the credit goes beyond the amount of employment taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC provisions and eligibility requirements have progressed with time. The best strategy is to talk to a tax expert or check out the official IRS site for the most comprehensive and updated info regarding the ERC, including any recent legislative changes or updates.
To qualify for the ERC, an organization should satisfy among the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and companies that got a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC involves completing the required types and including the credit on your work income tax return (usually Form 941). The exact time it takes to process the credit can vary based on numerous factors, including the intricacy of your organization and the work of the IRS. It’s advised to seek advice from a tax expert for assistance specific to your situation.
There are a number of companies that can help with the process of claiming the ERC. Some popular business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based upon general knowledge and may not reflect the most current updates or changes to the ERC. It is necessary to seek advice from a tax expert or go to the official IRS site for the most precise and current details relating to eligibility, claiming procedures, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on salaries paid to all workers whether they really worked or not. To put it simply, even if the.
employees worked full-time and got paid 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.
enabled just for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply money payments but also a part of the expense of company.
offered healthcare. What Are Qualified Wages For The Employee Retention Credit
Employers can be immediately compensated for the credit by minimizing the amount of payroll taxes they.