Lets talk first about What Are The Qualified Wages For The Employee Retention Credit :
Our team 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 people really learn more about the program we need to head to the space where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I mean you understand if you simply begin to 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 imply it’s simply I indicate think of how many real customers 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 validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you know when you
get this you know the check is opted for sure and that’s when they pay so they do not pay anything until they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their savings account and they can truly rely on Wonder trust that the procedure has actually been finished and how many you believe you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need you need specialists 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 really important today the worker retention credit which the majority of you have never heard of I definitely hadn’t become aware of it until very recently and discovered 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 staff members 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 Ideas 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 simply call your bank manager and say give 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 ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund alright go on sorry I simply have to make sure we got that point I imply that’s a huge difference a loan versus cash money I like cash cash 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 stunning difficult check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works since it sounds like to me if it’s a if it’s employee retention credit that person needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have 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 workers and you paid federal payroll taxes that’s why you would be qualified so you need 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 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part money how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that occur um they simply 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 as much as five thousand Max and after that 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 worker that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 internal revenue service so it’s huge clearly now the big concern is why does nobody understand about this due to the fact that appearance when I first became aware of this when I first met Josh you know I have actually got lots of investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I do not think it due to the fact that 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 and that were well been worthy of and we utilized them wisely to survive during the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my political leader good friends Governor 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 bunch of people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody learn about the employee retention credit you know what’s interesting you’re discussing the banks Kevin since in the PPP loan procedure 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 procedure procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you could not do both programs so if you had done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because 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 understand how to do this not really she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that went into this business and bottom line my firm Kevin has stayed in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose business is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a comparable 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 qualifying earnings paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings differs by whether an employer had, typically, basically than.
100 employees in 2019.
Business that concentrate on ERC filing support generally provide competence and assistance to help organizations browse the complex process of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? What Are The Qualified Wages For The Employee Retention Credit
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can declare, they can help identify.
Documentation and Calculation: ERC filing services will help in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit amount based on eligible salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can review your past payroll records and financials to recognize potential chances for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the required forms and documents in your place. This includes finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have evolved gradually. These companies stay upgraded with the most recent modifications and ensure that your filings comply with the most current guidelines. They can also offer ongoing assistance if the IRS demands additional info or conducts an audit related to your ERC claim.
It is essential to research study and vet any business providing ERC filing assistance to guarantee their reliability and proficiency. Try to find established firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who use ERC submitting support.
Remember that while these business can provide valuable support, it’s constantly a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate organizations to maintain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, companies need to meet one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As pointed out previously, for 2021, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of certified incomes paid to workers, including specific health plan expenditures. 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: Initially, businesses that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. The same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling eligible employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, normally Form 941. If the credit goes beyond the amount of work taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC provisions and eligibility requirements have evolved in time. The very best course of action is to speak with a tax expert or check out the main internal revenue service site for the most current and in-depth info relating to the ERC, consisting of any current legal changes or updates.
To receive the ERC, an organization must fulfill among the following criteria:.
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 invoices. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined 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.
The ERC is readily available to services of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and services that got a PPP loan may have restrictions on claiming the credit.
The procedure for declaring the ERC involves finishing the necessary types and consisting of the credit on your employment tax return (generally Type 941). The exact time it requires to process the credit can vary based on a number of elements, consisting of the intricacy of your organization and the work of the internal revenue service. It’s recommended to seek advice from a tax expert for assistance particular to your circumstance.
There are numerous companies that can help with the procedure of claiming the ERC. Some popular companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on basic knowledge and might not show the most current updates or changes to the ERC. It is essential to consult with a tax expert or go to the main internal revenue service site for the most current and precise info concerning eligibility, claiming procedures, and available assistance.
Less than 100. If the employer had 100 or less workers usually in 2019, then the credit is based.
on salaries paid to all staff members whether they actually worked or not. To put it simply, even if the.
employees worked full time and got paid 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.
allowed only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not just money payments but also a portion of the cost of employer.
supplied health care. What Are The Qualified Wages For The Employee Retention Credit
Employers can be instantly reimbursed for the credit by lowering the quantity of payroll taxes they.