Lets talk first about Employee Retention Credit Calculation :
Our group here what do these men doing everybody in this room is helping teach people about ERC and uh constantly offer a beautiful breakfast and have people really learn about the program we ought to head to the room where we are able 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 numerous millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I indicate you know if you just start 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 imply it’s just I imply think about 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 verified and the check is on the mail in the mail from the IRS heading to the consumer 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 do not pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the process has been ended up and how many you think you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need 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 discussing something really important today the staff member retention credit which the majority of you have never become aware of I definitely had not become aware of it up until really just recently and found out a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the professional 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 hard this isn’t like PPP we just call up your bank manager and state offer me a loan it doesn’t 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 spokesperson for this I love this program it’s going away very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a big difference a loan versus cash money I like cash 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual cash from the internal revenue service all right so let’s talk 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 an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have actually owned a business 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 qualified so you have to be on payroll in 2020 on the W-2 and you have 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 stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the turmoil of the pandemic so they wanted 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 up to 5 thousand Max and after that what occurs 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 worker that is since that’s a lot of money it is now there’s a caveat here the PPP cash would need to be minimized 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 someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York 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 internal revenue service so it’s big obviously now the big concern is why does no one learn about this because appearance when I initially became aware of this when I initially met Josh you know I’ve got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many numerous investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t believe 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 which were well should have and we utilized them carefully to survive during the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician pals Governor Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s fascinating 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 huge banks in our country and they would process procedure 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 chaos due to the fact that remember in the initial cares act you might not do both programs so if you had done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my company Kevin has actually been in business because 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 lot of our big big business clients have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose company is fully or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is totally or partly 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 similar quarter in 2019. When the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes differs by whether an employer had, typically, more or less than.
100 workers in 2019.
Business that focus on ERC filing support generally offer expertise and support to help services browse the complicated procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Calculation
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can claim, they can assist determine.
Documentation and Computation: ERC filing services will help in gathering the necessary documents, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based on eligible wages and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the required forms and documents in your place. This consists of completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have actually evolved over time. These companies stay upgraded with the current modifications and ensure that your filings adhere to the most existing guidelines. If the IRS requests additional info or performs an audit associated to your ERC claim, they can also supply continuous assistance.
It’s important to research study and vet any business offering ERC filing assistance to guarantee their credibility and proficiency. Try to find established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who use ERC filing support.
Bear in mind that while these business can offer valuable support, it’s always an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage businesses to maintain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers must satisfy one of two requirements:.
Business operations were totally or partly 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 significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away 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 qualified earnings paid to employees, consisting of certain health plan expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they got a PPP loan. However, the exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, allowing qualified companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to amend prior-year tax returns and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Kind 941. The excess can be refunded to the company if the credit goes beyond the amount of employment taxes owed.
It is necessary to note that the ERC arrangements and eligibility criteria have actually progressed in time. The best course of action is to consult with a tax expert or go to the main internal revenue service website for the most comprehensive and up-to-date details relating to the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a business must fulfill among the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC includes completing the required forms and including the credit on your employment income tax return (generally Kind 941). The exact time it takes to process the credit can vary based on numerous elements, consisting of the complexity of your organization and the workload of the internal revenue service. It’s advised to speak with a tax professional for assistance particular to your circumstance.
There are a number of business that can assist with the procedure of declaring the ERC. Some popular companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based upon general knowledge and may not show the most recent updates or modifications to the ERC. It is very important to consult with a tax expert or check out the official internal revenue service site for the most updated and accurate details regarding eligibility, declaring procedures, and available support.
Less than 100. If the employer had 100 or fewer employees on average in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
staff members worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members typically in 2019, then the credit is.
enabled just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments but also a part of the expense of employer.
offered health care. Employee Retention Credit Calculation
Companies can be right away repaid for the credit by lowering the amount of payroll taxes they.