Lets talk first about Employee Retention Credit 2022 Update :
Our group here what do these people doing everybody in this space is assisting teach people about ERC and uh always provide a beautiful breakfast and have people actually learn about the program we should head to the space 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 numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I indicate you understand if you simply begin to 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 indicate it’s simply I imply think of the number of real customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
receive this you understand the check is opted for sure and that’s when they pay so they do not pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the method they deposit it into their savings account and they can truly rely on Wonder trust that the procedure has been finished and how many you believe you have actually processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you require you need experts 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 Terrific here you’re at my YouTube channel we’re talking about something really crucial today the worker retention credit which the majority of you have never become aware of I certainly hadn’t become aware of it up until very recently and discovered a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have employees 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 challenging this isn’t like PPP we simply contact your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to find out all 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 came up with 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 almost everyone 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 fine go on sorry I just have to make sure we got that point I imply that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re discussing alright 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 gorgeous difficult check in the mail where you get actual money from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s worker retention credit that individual had 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 needed to have actually owned a business but it’s based upon you having W-2 employees in America not 10.99. so 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 need to be on payroll for the very first six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 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 preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s income 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 salary to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a lot of cash it is now there’s a caveat here the PPP money would have to be lowered 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 typically Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant 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 substantial undoubtedly now the huge question is why does nobody understand about this due to the fact that appearance when I first heard about this when I initially met Josh you know I have actually got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I don’t think it since I use 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 been worthy of and we used them carefully to stay alive throughout 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 buddies Governor Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no info out there then a bunch of people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the staff member retention credit you know what’s intriguing you’re talking about the banks Kevin because 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 nation and they would process process 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 turmoil because remember in the initial cares act you could not do both programs so if you had done PPP you might 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 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 business your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this company and bottom line my firm Kevin has stayed in business because 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big big business clients have actually dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
employer whose company is totally 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 organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by 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. Once the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying salaries varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support generally provide know-how and support to help companies browse the intricate process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2022 Update
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based on factors such as your market, revenue, and operations. They can assist determine if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Paperwork and Estimation: ERC filing services will help in collecting the essential paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based on qualified earnings and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the necessary forms and documents in your place. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually developed over time. These companies remain updated with the current modifications and guarantee that your filings adhere to the most existing standards. They can also provide continuous assistance if the internal revenue service demands extra details or carries out an audit related to your ERC claim.
It is necessary to research and vet any business offering ERC filing assistance to guarantee their trustworthiness and expertise. Search for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax specialists who provide ERC filing assistance.
Bear in mind that while these companies can supply valuable assistance, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee 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 goal of the ERC is to encourage companies to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, employers should satisfy one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. As mentioned earlier, for 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (as much as 70%) of certified wages paid to staff members, including specific health insurance expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received an Income Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. However, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting qualified companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have progressed in time. The very best strategy is to talk to a tax professional or visit the main internal revenue service website for the most comprehensive and current info relating to the ERC, consisting of any recent legal modifications or updates.
To receive the ERC, an organization should fulfill one of the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, federal government entities and businesses that received a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC involves finishing the needed forms and consisting of the credit on your work tax return (usually Form 941). The exact time it requires to process the credit can differ based on several factors, including the complexity of your organization and the workload of the IRS. It’s recommended to speak with a tax professional for assistance particular to your scenario.
There are several companies that can assist with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. 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 and contact these business straight to inquire about their charges and services.
Please note that the details provided here is based upon basic understanding and might not reflect the most current updates or changes to the ERC. It’s important to consult with a tax professional or visit the official internal revenue service site for the most precise and up-to-date information regarding eligibility, declaring procedures, and offered support.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on incomes paid to all staff members whether they actually worked or not. In other words, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments however likewise a portion of the cost of employer.
provided health care. Employee Retention Credit 2022 Update
Companies can be instantly compensated for the credit by decreasing the amount of payroll taxes they.