Lets talk first about 2023 Employee Retention Credit :
Our team here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always offer a stunning breakfast and have people truly learn more about the program we ought to head to the space where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I indicate 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 indicate it’s simply I imply consider the number of 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 internal revenue service heading to the client so that’s how you’re able to track it you understand when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything up until they really get the money they do not pay bottom line Wonder trust anything up until 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 actually been finished and how many you believe you’ve processed since you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you require specialists 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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the worker retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it till very recently and learned a lot about it because this is probably the lowest expense of capital for any small company anywhere
anytime if you have workers in 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 Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call your bank manager and say provide me a loan it does not 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 enjoy this program it’s going away soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I just need to make sure we got that point I mean that’s a big distinction a loan versus cash money I like cash 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 gorgeous tough check in the mail where you get actual cash from the IRS all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person needed to be a worker 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 staff members right you had to have actually owned a service however it’s based on you having W-2 workers 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 eligible 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 proper so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 during 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 six quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus because 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 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caution 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 two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the huge question is why does no one understand about this since look when I first found out about this when I initially met Josh you know I have actually got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that 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 which were well deserved and we utilized them sensibly to survive during the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was mayhem since remember in the initial cares act you might not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they changed 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 anybody about how to.
do this does your CFO know how to do this not truly she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually dealt with bottom line to recuperate other 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 created to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
employer whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’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 below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries differs by whether a company had, usually, basically than.
100 staff members in 2019.
Business that specialize in ERC filing assistance typically provide competence and support to help services browse the complicated process of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? 2023 Employee Retention Credit
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. They can assist determine if you satisfy the requirements for the credit and identify the maximum credit quantity you can declare.
Documents and Calculation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based upon eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize potential chances for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the essential types and documentation in your place. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed gradually. These business remain upgraded with the current changes and make sure that your filings comply with the most present standards. If the Internal revenue service demands extra information or conducts an audit associated to your ERC claim, they can also supply ongoing support.
It is essential to research study and vet any company offering ERC filing support to guarantee their reliability and knowledge. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who use ERC filing assistance.
Remember that while these business can supply valuable support, it’s always a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate organizations to maintain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers must meet one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of certified wages paid to staff members, consisting of specific health insurance 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, organizations that got an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. Nevertheless, the very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, permitting eligible employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for services to modify 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 Type 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually developed with time. The very best strategy is to talk to a tax professional or go to the official internal revenue service website for the most detailed and current details concerning the ERC, including any current legal modifications or updates.
To get approved for the ERC, a company needs to satisfy 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 significant decrease in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC involves completing the required forms and consisting of the credit on your employment tax return (generally Form 941). The exact time it takes to process the credit can vary based on several factors, including the intricacy of your business and the work of the internal revenue service. It’s advised to speak with a tax professional for assistance particular to your situation.
There are numerous companies that can help with the process of declaring the ERC. Some widely known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on general understanding and might not show the most current updates or modifications to the ERC. It is very important to consult with a tax expert or go to the official internal revenue service site for the most accurate and current details concerning eligibility, declaring treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on earnings paid to all employees whether they in fact worked or not. In other words, even if the.
employees worked full-time and earned money 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.
permitted only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply cash payments but likewise a portion of the expense of employer.
supplied health care. 2023 Employee Retention Credit
Employers can be immediately reimbursed for the credit by decreasing the quantity of payroll taxes they.