Lets talk first about Who Qualifies For Employee Retention Credit :
Our group here what do these men doing everybody in this space is helping teach people about ERC and uh always supply a gorgeous breakfast and have individuals really learn about the program we ought to head to the room where we are able to display some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I mean you know if you just 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 indicate it’s simply I suggest consider the number of 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 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 till they actually receive the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their savings account and they can truly trust Wonder trust that the procedure has been completed and how many you believe you have actually processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you need 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 Fantastic here you’re at my YouTube channel we’re speaking about something truly important today the staff member retention credit which the majority of you have never become aware of I certainly had not heard of it up until really recently and found out a lot about it due to the fact that this is probably the most affordable expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 just phone your bank supervisor and say provide 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 ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I simply need to make certain we got that point I suggest that’s a huge distinction a loan versus cash money I like cash cash that’s what we’re talking 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 cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s worker retention credit that individual had to be a staff member 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 employees right you needed to have actually owned an organization however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 have to be on payroll for the first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part money how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the employee’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 an optimum of seven thousand per quarter how did that occur um they just changed 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 approximately 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city 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 substantial undoubtedly now the big concern is why does nobody understand about this due to the fact that appearance when I initially heard about this when I initially met Josh you know I’ve got lots of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t believe it since I use 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 should have and we utilized them wisely to stay alive throughout 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 good friends Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how false information is that there’s no details out there then a lot 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 staff member retention credit you know what’s fascinating you’re discussing the banks Kevin because 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 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 procedure that’s all um and here there was chaos since remember in the original cares act you might not do both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were not 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 anybody about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it before 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 accounting professional no your accountant’s never done this prior to unless you have an account that entered into this company and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose business is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Schedule.
1. The credit is readily available to all companies no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether a company had, usually, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing assistance usually offer competence and support to assist organizations browse the complicated procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Who Qualifies For Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based on factors such as your industry, income, and operations. They can help determine if you meet the requirements for the credit and identify the maximum credit amount you can claim.
Paperwork and Calculation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit quantity based on eligible incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can review your previous payroll records and financials to identify potential chances for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the essential forms and documentation on your behalf. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved in time. These business remain upgraded with the current modifications and ensure that your filings abide by the most existing guidelines. If the IRS requests additional info or performs an audit associated to your ERC claim, they can also provide ongoing assistance.
It’s important to research study and veterinarian any company using ERC filing support to ensure their reliability and expertise. Search for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC submitting support.
Bear in mind that while these companies can provide important assistance, it’s always a good concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee 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 goal of the ERC is to encourage companies to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, employers need to satisfy one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed previously, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified wages paid to staff members, including specific health insurance 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, services that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. However, the exact same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, enabling eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Kind 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have actually evolved gradually. The best strategy is to speak with a tax professional or go to the main internal revenue service site for the most up-to-date and comprehensive details relating to the ERC, consisting of any recent legal modifications or updates.
To receive the ERC, an organization must satisfy one of the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. For example, federal government entities and companies that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes completing the essential forms and consisting of the credit on your work income tax return (generally Type 941). The exact time it requires to process the credit can vary based upon numerous elements, including the intricacy of your organization and the work of the internal revenue service. It’s recommended to consult with a tax expert for guidance specific to your situation.
There are a number of companies that can assist with the procedure of claiming the ERC. Some popular companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based on general knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to talk to a tax expert or check out the main IRS site for the most precise and current details regarding eligibility, claiming procedures, and available support.
Less than 100. If the employer had 100 or fewer workers on average in 2019, then the credit is based.
on earnings paid to all staff members whether they actually worked or not. In other words, even if the.
workers worked full time and earned money 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.
permitted just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments however also a part of the expense of employer.
offered healthcare. Who Qualifies For Employee Retention Credit
Payment.
Companies can be instantly reimbursed for the credit by reducing the quantity of payroll taxes they.