Lets talk first about Does Employee Retention Credit Reduce Deductible Wages :
Our group here what do these people doing everybody in this room is helping teach people about ERC and uh constantly supply a gorgeous breakfast and have people actually learn about the program we ought to head to the space where we have the ability to display a few of the checks that we are getting for companies and I want 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 way I mean you understand if you simply 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 imply it’s just I mean think about the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they in fact get the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the procedure has actually been ended up and how many you think you have actually processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require you require 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 really important today the staff member retention credit which most of you have never heard of I definitely had not become aware of it till really recently and found out a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I have actually 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 challenging 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 tell us all about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered services 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 difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund okay go on sorry I simply need to ensure we got that point I imply that’s a huge difference a loan versus cash cash I like money cash that’s what we’re speaking 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 original 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 discuss how it works since it seems like to me if it’s a if it’s worker retention credit that person needed to be an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have owned an organization however it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to an optimum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the chaos of the pandemic so they wished to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and then 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 worker that is because that’s a lot of cash it is now there’s a caution here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city 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 huge obviously now the big question is why does nobody learn about this due to the fact that appearance when I first became aware of this when I first satisfied Josh you understand I have actually got great deals of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many numerous financial investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I do not think it due to the fact that I utilize 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 which were well deserved and we utilized them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t hold 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 false information is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the employee retention credit you understand what’s interesting you’re discussing the banks Kevin since 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was turmoil because remember in the original cares act you could refrain from doing both programs so if you had 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 ever made it clear to anyone about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies 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 service and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate customers have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose organization is totally or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Accessibility.
1. The credit is available to all companies regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’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 listed below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation 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 meaning of certifying earnings differs by whether an employer had, usually, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing support typically supply expertise and assistance to assist services browse the complicated process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Does Employee Retention Credit Reduce Deductible Wages
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can claim, they can help identify.
Paperwork and Computation: ERC filing services will help in gathering the essential paperwork, such as payroll records and financial statements, to support your claim. They will also help determine the credit amount based on eligible incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the essential forms and documents in your place. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have developed over time. These business stay updated with the current changes and guarantee that your filings abide by the most current standards. If the IRS demands extra details or performs an audit associated to your ERC claim, they can also offer ongoing assistance.
It is very important to research and veterinarian any company providing ERC filing assistance to guarantee their credibility and knowledge. Try to find established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who use ERC submitting support.
Bear in mind that while these companies can offer important support, it’s always a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage organizations to maintain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To certify, companies must satisfy one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As mentioned previously, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away 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 percentage (up to 70%) of certified earnings paid to staff members, including certain health insurance costs. 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 received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they received a PPP loan. The exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, allowing qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, normally Kind 941. The excess can be reimbursed to the employer if the credit exceeds the amount of employment taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have developed over time. The very best course of action is to consult with a tax professional or go to the official internal revenue service website for the most up-to-date and detailed info regarding the ERC, including any current legal changes or updates.
To get approved for the ERC, an organization needs to satisfy among the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that got a PPP loan may have restrictions on declaring the credit.
The process for claiming the ERC involves finishing the essential types and including the credit on your work tax return (usually Kind 941). The exact time it takes to process the credit can vary based upon a number of aspects, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s suggested to talk to a tax professional for assistance specific to your circumstance.
There are several companies that can assist with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some well-known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these companies straight to inquire about their costs and services.
Please keep in mind that the info provided here is based on general knowledge and might not show the most recent updates or changes to the ERC. It is necessary to speak with a tax professional or go to the main IRS website for the most accurate and current information regarding eligibility, claiming treatments, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all workers whether they really worked or not. Simply put, even if the.
staff members worked full-time and earned money for full time work, the company 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 wages paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not just cash payments however also a part of the cost of company.
offered healthcare. Does Employee Retention Credit Reduce Deductible Wages
Payment.
Companies can be immediately compensated for the credit by minimizing the amount of payroll taxes they.