Lets talk first about Eligible Employers For Employee Retention Credit :
Our group here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals actually learn about the program we should head to the room where we are able to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I imply you understand if you simply start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I indicate consider 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 verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you
receive this you understand the check is gone for sure which’s when they pay so they don’t pay anything till they really receive the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their bank account and they can genuinely trust Wonder trust that the process has actually been ended up and the number of you think you’ve processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need specialists 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 talking about something really crucial today the staff member retention credit which most of you have never ever 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 most affordable expense of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call your bank supervisor and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually 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 simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses 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 big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply have to ensure we got that point I mean that’s a huge distinction a loan versus money cash I like cash money 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 tough check in the mail where you get actual cash from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that person had 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 investors it’s for employees 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 need 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 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. all right 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 cash just how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that take place um they simply altered 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 up to 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 six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars a person 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the huge concern is why does no one know about this since appearance when I initially became aware of this when I initially satisfied Josh you understand I’ve got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them carefully to stay alive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my political leader friends Governor Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s interesting you’re talking 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 huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was turmoil due to the fact that remember in the initial cares act you might not do both programs so if you had done PPP you could not do ERC in the original program and when they altered 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 government never made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’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 accounting professional’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually stayed in business because 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 business clients have worked 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 government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Because of COVID-19 or whose gross invoices, company whose company is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a comparable 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 qualifying salaries paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing support usually offer knowledge and assistance to help companies navigate the complex process of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Eligible Employers For Employee Retention Credit
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based upon factors such as your industry, earnings, and operations. They can assist figure out if you meet the requirements for the credit and identify the optimum credit amount you can declare.
Paperwork and Calculation: ERC filing services will assist in gathering the needed documents, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based on eligible wages and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the essential forms and paperwork on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually progressed gradually. These companies remain updated with the most recent changes and guarantee that your filings comply with the most present standards. They can likewise provide ongoing assistance if the IRS demands additional info or carries out an audit related to your ERC claim.
It is essential to research study and veterinarian any company using ERC filing help to ensure their credibility and competence. Try to find established companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax experts who provide ERC submitting support.
Keep in mind that while these companies can provide valuable help, it’s always an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate services to maintain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies should satisfy one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of certified salaries paid to workers, including certain health plan expenditures. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. However, the very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, enabling eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, typically Form 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 arrangements and eligibility criteria have progressed gradually. The best strategy is to seek advice from a tax expert or go to the official IRS site for the most comprehensive and updated info relating to the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a service must satisfy among the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and services that got a PPP loan might have constraints on claiming the credit.
The process for declaring the ERC involves finishing the required forms and including the credit on your employment income tax return (generally Form 941). The exact time it takes to process the credit can differ based on numerous factors, including the complexity of your company and the work of the IRS. It’s advised to consult with a tax professional for guidance specific to your circumstance.
There are numerous companies that can aid with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some popular companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these business straight to inquire about their fees and services.
Please keep in mind that the information supplied here is based on general knowledge and may not show the most current updates or modifications to the ERC. It is essential to seek advice from a tax professional or go to the main internal revenue service website for the most up-to-date and precise details concerning eligibility, claiming treatments, and readily available help.
Less than 100. If the company had 100 or less staff members usually in 2019, then the credit is based.
on wages paid to all workers 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 company still gets the credit.
Greater than 100. If the employer had more than 100 staff members usually in 2019, then the credit is.
allowed just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but also a part of the cost of company.
provided healthcare. Eligible Employers For Employee Retention Credit
Employers can be instantly compensated for the credit by lowering the amount of payroll taxes they.