Lets talk first about Worksheet 2 Adjusted Employee Retention Credit :
Our group here what do these people doing everybody in this space is assisting teach people about ERC and uh always offer a lovely breakfast and have people really learn about the program we ought to head to the space where we have the ability to display 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 actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I mean you know if you just begin to take a look at some of these here I mean 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 about how many real customers 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’re able to track it you understand when you
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their checking account and they can truly trust Wonder trust that the procedure has been ended up and the number of you think you’ve processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you require professionals 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 Wonderful here you’re at my YouTube channel we’re discussing something truly crucial today the employee retention credit which most of you have never ever heard of I definitely had not heard of it till very just recently and discovered a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have workers 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call your bank manager and state provide me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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.
correct the money money payroll tax refund all right go on sorry I simply have to ensure we got that point I mean that’s a big difference a loan versus cash money I like money cash that’s what we’re talking about fine 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 gorgeous hard check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have owned a company but it’s based upon you having W-2 workers 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 eligible so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income 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 turmoil of the pandemic so they wished 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 create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caution here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten 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 money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the big concern is why does no one understand about this because appearance when I first found out about this when I first satisfied Josh you understand I’ve got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t think it because I utilize the PPP we went through the money 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 carefully to survive during the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my politician friends Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a bunch of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin because in the PPP loan process the federal government made it really 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 procedure 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 mayhem due to the fact that keep in mind in the initial cares act you could refrain from doing 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 really he or she’s never done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this business and bottom line my firm Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other 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 as much as $10,000 in incomes paid by an.
employer whose company is fully or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Schedule.
1. The credit is readily available to all companies despite size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the company has 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 federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. Once the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether an employer had, typically, more or less than.
100 workers in 2019.
Business that focus on ERC filing support generally offer expertise and support to help companies browse the complicated process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Worksheet 2 Adjusted Employee Retention Credit
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based on aspects such as your market, profits, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can claim, they can assist figure out.
Documents and Computation: ERC filing services will assist in collecting the needed documents, such as payroll records and financial statements, to support your claim. They will also help determine the credit amount based on eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your past payroll records and financials to determine prospective chances for retroactive credits. They can help you change prior income tax return to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the required types and documentation on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have progressed over time. These business stay updated with the current modifications and ensure that your filings adhere to the most current standards. If the Internal revenue service demands extra details or performs an audit associated to your ERC claim, they can also supply continuous assistance.
It is very important to research study and veterinarian any business providing ERC filing help to ensure 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 filing support.
Remember that while these companies can supply valuable assistance, it’s always a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure 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 procedures. The objective of the ERC is to motivate services to maintain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, employers must meet one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned earlier, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease 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.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of qualified salaries paid to employees, consisting of specific health insurance expenditures. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, allowing eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Form 941. The excess can be refunded to the employer if the credit surpasses the quantity of work taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have actually evolved gradually. The very best strategy is to seek advice from a tax professional or go to the main IRS website for the most up-to-date and in-depth info relating to the ERC, including any recent legislative modifications or updates.
To receive the ERC, a business should meet among the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. 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% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and organizations that received a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC includes completing the needed types and consisting of the credit on your work income tax return (generally Type 941). The exact time it takes to process the credit can differ based on numerous factors, including the complexity of your business and the workload of the internal revenue service. It’s suggested to talk to a tax professional for assistance specific to your scenario.
There are a number of business that can aid with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some widely known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these companies straight to ask about their costs and services.
Please note that the info supplied here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It is necessary to speak with a tax professional or visit the official internal revenue service site for the most up-to-date and accurate details relating to eligibility, claiming treatments, and offered assistance.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on earnings paid to all employees whether they in fact worked or not. To put it simply, 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 company had more than 100 staff members on average in 2019.
enabled only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments however also a portion of the cost of company.
supplied health care. Worksheet 2 Adjusted Employee Retention Credit
Payment.
Employers can be immediately reimbursed for the credit by decreasing the amount of payroll taxes they.