Lets talk first about What Is This Employee Retention Credit :
Our team here what do these men doing everybody in this space is helping teach individuals about ERC and uh always provide a gorgeous breakfast and have people really learn about the program we should head to the room where we have the ability to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless 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 mean you know if you simply start to 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 indicate it’s just I suggest consider how many 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 confirmed 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 know when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the procedure has been finished and how many you think you have actually processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you need specialists 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 Terrific here you’re at my YouTube channel we’re speaking about something actually crucial today the employee retention credit which the majority of you have actually never heard of I definitely hadn’t become aware of it until really just recently and found out 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 in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply phone your bank manager and say give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses three 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund okay go on sorry I simply need to make certain we got that point I indicate that’s a big difference a loan versus cash cash I like money cash that’s what we’re talking 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 stunning difficult check in the mail where you get real cash from the IRS all right so let’s speak about 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 an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have actually owned a business but it’s based upon 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 qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were 6 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 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part cash just how much can you return per employee 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 salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wanted to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop 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 great deal of money it is now there’s a caveat 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 decrease the 26 000 so what we’re seeing typically 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 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 IRS so it’s big certainly now the huge question is why does no one know about this since look when I initially heard about this when I initially met Josh you understand I have actually got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make many many investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I do not think it because 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 been worthy of and we used them sensibly to survive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my political leader buddies Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no info out there then a lot of people told 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 know about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you wanted 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 just 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 actually done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this before unless you have an account that entered 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 recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate customers have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose company 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 despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing help typically supply competence and assistance to assist businesses browse the intricate process of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? What Is This Employee Retention Credit
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can help determine if you meet the requirements for the credit and determine the maximum credit quantity you can declare.
Paperwork and Computation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based on qualified incomes and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine prospective opportunities for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and submit the necessary kinds and paperwork on your behalf. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have progressed in time. These business remain upgraded with the current modifications and ensure that your filings adhere to the most present guidelines. They can also provide ongoing support if the internal revenue service requests additional details or performs an audit related to your ERC claim.
It is very important to research and vet any business offering ERC filing support to guarantee their credibility and expertise. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who provide ERC filing support.
Keep in mind that while these business can offer important help, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate services to retain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, employers should meet one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As pointed out earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices 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 amount amounts to a portion (as much as 70%) of qualified salaries paid to workers, including specific health plan expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. Nevertheless, the exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, allowing qualified companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for services to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Type 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have actually evolved gradually. The best course of action is to talk to a tax professional or go to the official internal revenue service website for the most comprehensive and current information concerning the ERC, including any recent legislative changes or updates.
To qualify for the ERC, an organization should meet one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and businesses that got a PPP loan might have constraints on declaring the credit.
The process for claiming the ERC includes finishing the required forms and consisting of the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can vary based upon several factors, including the complexity of your service and the workload of the internal revenue service. It’s suggested to talk to a tax expert for guidance specific to your circumstance.
There are numerous business that can aid with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some popular companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these companies straight to inquire about their services and fees.
Please note that the info provided here is based upon basic understanding and might not show the most current updates or modifications to the ERC. It’s important to talk to a tax expert or go to the main internal revenue service website for the most accurate and current information relating to eligibility, claiming procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on salaries paid to all employees whether they really worked or not. In other words, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
enabled only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments however likewise a part of the expense of employer.
provided healthcare. What Is This Employee Retention Credit
Companies can be immediately compensated for the credit by reducing the amount of payroll taxes they.