Lets talk first about What Is Employee Retention Credit (Erc) :
Our group here what do these people doing everybody in this space is assisting teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals truly learn about the program we need to head to the space where we have the ability to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I mean you know if you just start 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 imply it’s just I imply think about how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified 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 know when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything till they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed given that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need you need 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 discussing something actually crucial today the employee retention credit which the majority of you have never ever become aware of I definitely had not become aware of it till extremely recently and learned a lot about it since 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 have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just contact your bank supervisor and say offer 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 have actually become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund alright go on sorry I simply need to make certain we got that point I indicate that’s a huge distinction a loan versus cash money I like money 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 gorgeous hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that person needed to be an employee 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 needed to have actually 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 staff members and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the mayhem 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 approximately 5 thousand Max and then what happens 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 since that’s a lot of cash it is now there’s a caution here the PPP money would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s state hypothetically you owned a restaurant 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 IRS so it’s big obviously now the huge concern is why does no one understand about this since look when I first heard about this when I initially met Josh you understand I have actually got lots of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since 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 and that were well deserved and we used them sensibly to survive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader pals Guv Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 huge 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 turmoil due to the fact that keep in mind in the initial cares act you could not do both programs so if you had done PPP you could 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 federal government never made it clear to any person about how to.
do this does your CFO know how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few 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 company and bottom line my firm Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business customers have worked with bottom line to recuperate other federal 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 worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Since of COVID-19 or whose gross invoices, company whose organization is totally or partly suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all companies no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, on average, basically than.
100 staff members in 2019.
Business that focus on ERC filing support generally provide knowledge and support to assist businesses browse the intricate procedure of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? What Is Employee Retention Credit (Erc)
Eligibility Evaluation: These companies will evaluate your organization’s eligibility for the ERC based on aspects such as your market, profits, and operations. They can assist determine if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will help in collecting the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit quantity based upon qualified earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can review your past payroll records and financials to determine prospective opportunities for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the necessary forms and paperwork in your place. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have progressed gradually. These business remain updated with the most recent modifications and guarantee that your filings abide by the most current guidelines. They can likewise supply continuous support if the IRS demands extra info or performs an audit related to your ERC claim.
It is necessary to research and vet any business offering ERC filing assistance to guarantee their credibility and knowledge. Try to find recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC submitting assistance.
Remember that while these business can offer important help, it’s always a good idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to maintain and pay their workers 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, including for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, companies need to satisfy one of two criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a substantial decline is defined 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 receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away 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 (as much as 70%) of qualified earnings paid to staff members, consisting of specific 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 received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, enabling qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Kind 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC arrangements and eligibility requirements have developed over time. The best course of action is to talk to a tax professional or visit the official internal revenue service site for the most comprehensive and updated details relating to the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, a service should fulfill one of the following criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decrease is specified 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 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 readily available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, federal government entities and businesses that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes completing the needed forms and including the credit on your employment tax return (usually Type 941). The exact time it requires to process the credit can vary based upon several elements, consisting of the complexity of your organization and the workload of the internal revenue service. It’s advised to seek advice from a tax professional for assistance particular to your scenario.
There are numerous companies that can assist with the procedure of declaring the ERC. Some well-known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon basic knowledge and may not reflect the most recent updates or changes to the ERC. It is essential to talk to a tax expert or check out the official IRS site for the most up-to-date and precise details relating to eligibility, declaring treatments, and available help.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on incomes paid to all workers whether they actually worked or not. In other words, even if the.
workers 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 employees on average in 2019.
allowed only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not simply cash payments but likewise a portion of the expense of employer.
offered health care. What Is Employee Retention Credit (Erc)
Payment.
Companies can be immediately compensated for the credit by decreasing the amount of payroll taxes they.