Lets talk first about When Is The Employee Retention Credit Due :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh always offer a gorgeous breakfast and have people really discover the program we ought to head to the room where we are able to show a few 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 way I indicate you understand if you just start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean think about how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified 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 understand when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything till 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 way they deposit it into their bank account and they can really rely on Wonder trust that the procedure has been finished and the number of you think you’ve processed because 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 require you require 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 talking about something really crucial today the worker retention credit which the majority of you have never become aware of I definitely hadn’t become aware of it up until very just recently and learned a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator 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 phone your bank supervisor and say offer me a loan it doesn’t 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 like this program it’s going away soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations 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 distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund all right go on sorry I just need to make certain we got that point I imply that’s a huge difference a loan versus cash money I like cash money 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 initial cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have actually owned a service 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 need to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 proper so there were six 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 2 and 3 of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wanted 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 five thousand Max and after that what takes place 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 staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual 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 internal revenue service so it’s substantial obviously now the huge question is why does no one learn about this because look when I first found out about this when I first satisfied Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make numerous lots of investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I do not 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 and that were well should have and we used them wisely to survive throughout 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 know about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a lot of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one learn about the worker retention credit you know what’s intriguing you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it extremely clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process procedure 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 not do both programs so if you had done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never 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 company 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 company Kevin has actually stayed in business because 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate 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 incomes paid by an.
employer whose business is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether a company had, typically, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support normally supply competence and support to assist organizations navigate the complex process of declaring the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? When Is The Employee Retention Credit Due
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based upon elements such as your market, income, and operations. They can help figure out if you meet the requirements for the credit and recognize the maximum credit amount you can claim.
Documents and Estimation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit amount based upon qualified wages and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can examine your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the essential kinds and documents on your behalf. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have developed gradually. These companies remain upgraded with the most recent changes and guarantee that your filings abide by the most present guidelines. If the IRS demands additional info or carries out an audit associated to your ERC claim, they can also provide ongoing assistance.
It is necessary to research study and vet any company providing ERC filing assistance to guarantee their trustworthiness and know-how. Look for established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who use ERC submitting support.
Keep in mind that while these business can offer valuable support, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed 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 measures. The objective of the ERC is to encourage organizations to maintain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, employers should fulfill one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed previously, for 2021, a considerable decrease is defined as a 20% decrease in gross invoices 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 very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified earnings paid to workers, including certain 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: Initially, organizations that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. However, the exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, allowing qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for businesses to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, typically Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the company.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually developed in time. The best strategy is to speak with a tax expert or visit the official internal revenue service website for the most in-depth and current information regarding the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, an organization should meet among the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, but there are some exceptions. For example, federal government entities and services that got a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC involves finishing the needed types and consisting of the credit on your work income tax return (usually Kind 941). The exact time it requires to process the credit can vary based on several elements, consisting of the intricacy of your service and the workload of the internal revenue service. It’s recommended to speak with a tax professional for guidance particular to your situation.
There are a number of companies that can aid with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these business straight to ask about their services and charges.
Please note that the details offered here is based upon general understanding and might not show the most recent updates or modifications to the ERC. It is very important to talk to a tax professional or check out the main IRS website for the most updated and accurate information relating to eligibility, claiming treatments, and available help.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
permitted just for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments but likewise a portion of the cost of company.
supplied healthcare. When Is The Employee Retention Credit Due
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.