Lets talk first about 2017 Employee Retention Credit :
Our group here what do these men doing everyone in this room is assisting teach individuals about ERC and uh always supply a beautiful breakfast and have individuals really find out about the program we must head to the space where we have the ability to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I imply 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 indicate it’s just I mean consider 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 validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything until they actually get the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you need you need experts 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 talking about something actually essential today the employee retention credit which most of you have actually never heard of I definitely hadn’t heard of it up until very recently and found out a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have employees 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 up your bank supervisor and say give me a loan it doesn’t 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 become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to find out all about it let’s talk staff member 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 used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I just need to make sure we got that point I indicate that’s a big distinction a loan versus money cash I like money cash that’s what we’re discussing 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 stunning hard check in the mail where you get real cash from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker retention credit that person had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have actually owned a service 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 have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the turmoil 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 as much as five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create 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 money it is now there’s a caution here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 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 internal revenue service so it’s substantial clearly now the big question is why does no one learn about this since appearance when I first found out about this when I initially fulfilled 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 many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that I use 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 been worthy of and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us 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 bunch of individuals informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one understand about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process procedure 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 mayhem since remember in the original cares act you could not do both programs so if you had actually done PPP you might not do ERC in the original program and when they altered 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 understand how to do this not truly she or he’s never done it in the past 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 company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business because 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 lot of our huge huge corporate clients have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize 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 employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose organization is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether a company had, on average, more or less than.
100 employees in 2019.
Business that focus on ERC filing assistance typically provide proficiency and assistance to help companies navigate the intricate process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? 2017 Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your organization’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. They can assist identify if you fulfill the requirements for the credit and recognize the maximum credit quantity you can declare.
Paperwork and Estimation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial statements, to support your claim. They will also help determine the credit amount based upon eligible wages and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually evolved over time. These companies remain updated with the current changes and make sure that your filings adhere to the most present guidelines. They can also offer ongoing support if the internal revenue service demands additional details or performs an audit related to your ERC claim.
It is essential to research study and veterinarian any company providing ERC filing assistance to ensure their credibility and expertise. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who provide ERC submitting support.
Remember that while these business can offer valuable assistance, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate businesses to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit services, tax-exempt companies, and certain governmental entities. To qualify, employers should meet one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As mentioned previously, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the 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 (approximately 70%) of certified incomes paid to staff members, consisting of specific health insurance costs. The maximum credit per employee 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 Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. The exact same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, generally Kind 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have actually developed in time. The very best strategy is to talk to a tax expert or visit the official internal revenue service website for the most detailed and updated details relating to the ERC, consisting of any current legislative changes or updates.
To receive the ERC, an organization should meet among the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC involves completing the essential forms and consisting of the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can differ based on a number of elements, including the complexity of your company and the workload of the internal revenue service. It’s recommended to talk to a tax expert for guidance particular to your circumstance.
There are several companies that can help with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some popular companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and get in touch with these business directly to ask about their services and fees.
Please keep in mind that the info supplied here is based on basic understanding and might not show the most recent updates or changes to the ERC. It is necessary to consult with a tax expert or go to the main IRS site for the most precise and updated info regarding eligibility, claiming procedures, and available support.
Less than 100. If the employer had 100 or fewer workers typically in 2019, then the credit is based.
on wages paid to all employees whether they really worked or not. To put it simply, even if the.
employees worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees usually in 2019, then the credit is.
enabled only for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments however likewise a portion of the expense of company.
provided health care. 2017 Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.