Lets talk first about Employee Retention Credit Application :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals truly learn about the program we must head to the room where we have the ability to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I suggest you know if you just start to 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 mean it’s just I suggest think of the number of actual 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 validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything till they in fact get the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the procedure has been finished and how many you believe you’ve processed considering that you began 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 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 speaking about something actually essential today the worker retention credit which the majority of you have actually never ever become aware of I certainly hadn’t heard of it until very recently and learned a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator 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 contact your bank manager 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 ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund all right go on sorry I just need to ensure we got that point I mean that’s a huge difference a loan versus cash money I like money money 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have actually owned a service however it’s based upon you having W-2 employees 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 correct so there were six 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 2 and three of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the turmoil of the pandemic so they wished to even get more to keep those workers 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 after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of money it is now there’s a caveat here the PPP money 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 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 employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the huge concern is why does no one understand about this since look when I first heard about this when I initially fulfilled Josh you understand I’ve got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I do not think it because 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 and that were well been worthy of and we utilized them wisely to survive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even called to my political leader buddies Governor Senators they didn’t know about it I imply that’s how you understand that’s how false information is that there’s no information out there then a lot of people 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 learn about the staff member retention credit you know 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 very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation 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 because 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 since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO know 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 a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this prior to unless you have an account that went into this service and bottom line my firm Kevin has actually been in business considering that 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate clients have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose business is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by 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. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing assistance usually provide knowledge and assistance to help companies browse the intricate process of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Application
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based on elements such as your market, revenue, and operations. If you meet the requirements for the credit and identify the optimum credit quantity you can claim, they can help figure out.
Documents and Computation: ERC filing services will help in collecting the required documentation, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit quantity based on eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can examine your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the required forms and paperwork on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually developed over time. These business stay upgraded with the most recent modifications and make sure that your filings abide by the most existing standards. They can also offer continuous support if the internal revenue service demands extra information or performs an audit related to your ERC claim.
It is very important to research study and vet any business offering ERC filing support to guarantee their reliability and competence. Try to find recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax experts who use ERC filing assistance.
Keep in mind that while these companies can offer valuable help, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure precise filings.
The Worker 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 encourage companies to retain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit companies, tax-exempt companies, and particular governmental entities. To certify, employers should meet one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified incomes paid to staff members, consisting of specific health insurance 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 Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. The same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, enabling eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for businesses to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, typically Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have progressed in time. The very best strategy is to talk to a tax expert or visit the official IRS website for the most in-depth and up-to-date details concerning the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business must fulfill among the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline 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.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes finishing the needed types and including the credit on your work tax return (usually Type 941). The exact time it takes to process the credit can vary based upon a number of elements, including the complexity of your organization and the work of the IRS. It’s suggested to seek advice from a tax professional for assistance particular to your scenario.
There are a number of business that can aid with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some popular companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and contact these business directly to ask about their charges and services.
Please note that the information offered here is based upon general knowledge and may not show the most current updates or modifications to the ERC. It’s important to speak with a tax professional or visit the official internal revenue service website for the most precise and current information regarding eligibility, declaring procedures, and offered support.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full-time and made 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 just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments but likewise a portion of the expense of company.
supplied health care. Employee Retention Credit Application
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.