Lets talk first about Employee Retention Credit Carryback :
Our group here what do these people doing everybody in this room is helping teach people about ERC and uh constantly offer a stunning breakfast and have individuals actually learn about the program we should head to the room where we have the ability to display some of the checks that we are getting for companies and I ‘d like 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 clients verifying that the check is on the method I indicate you understand if you simply start to take a look at a few of these here I suggest 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 real customers 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 internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything up until they actually receive the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their checking account and they can genuinely rely on Wonder trust that the process has been ended up and how many you think you have actually processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need 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 Terrific here you’re at my YouTube channel we’re speaking about something truly crucial today the employee retention credit which the majority of you have actually never ever become aware of I certainly had not heard of it till very recently and learned a lot about it due to the fact that this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank supervisor and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money money payroll tax refund okay go on sorry I simply have to ensure we got that point I imply that’s a huge distinction a loan versus cash money I like money cash that’s what we’re talking about 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 difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person had to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have actually owned a business but it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 staff members 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 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since 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 up to 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 great deal of cash it is now there’s a caution here the PPP cash would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the big question is why does no one understand about this since appearance when I first became aware of this when I initially met Josh you know I’ve got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in business owners of which numerous suffered through the pandemic when I initially found out 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 very easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we used them sensibly to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even called to my political leader friends Guv Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no information out there then a bunch of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s interesting you’re discussing the banks Kevin because in the PPP loan process 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 country and they would process process 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 turmoil due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually 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 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 any person about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this business 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 money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate clients have worked with bottom line to recover other government programs we’ve 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 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 approximately $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose service is completely or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers no matter 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 Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices go above 80% of a similar 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 certifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing support typically provide proficiency and support to assist businesses navigate the complex process of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Carryback
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based on factors such as your market, profits, and operations. They can help determine if you fulfill the requirements for the credit and recognize the maximum credit quantity you can declare.
Documents and Estimation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit amount based upon eligible earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to identify potential chances for retroactive credits. They can assist you amend previous tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the required forms and documentation on your behalf. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have evolved over time. These business remain updated with the most recent changes and guarantee that your filings comply with the most present standards. If the IRS demands additional information or carries out an audit associated to your ERC claim, they can likewise supply continuous assistance.
It is very important to research study and vet any business offering ERC filing help to guarantee their trustworthiness and competence. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who use ERC filing assistance.
Remember that while these companies can provide important support, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate businesses to maintain and pay their employees 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 eligible companies, including for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers should fulfill one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As mentioned previously, for 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Amount: 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 (up to 70%) of certified wages paid to workers, consisting of particular health insurance expenses. 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 got a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. Nevertheless, the very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, permitting eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, generally Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the company.
It is necessary to note that the ERC provisions and eligibility requirements have actually developed gradually. The best course of action is to seek advice from a tax expert or visit the official internal revenue service website for the most updated and comprehensive information relating to the ERC, consisting of any recent legal changes or updates.
To receive the ERC, a business must meet one of the following requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. For example, federal government entities and companies that got a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC includes completing the essential forms and including the credit on your employment tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon several factors, consisting of the complexity of your service and the work of the internal revenue service. It’s recommended to seek advice from a tax professional for assistance particular to your circumstance.
There are a number of companies that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these business straight to inquire about their services and fees.
Please note that the information offered here is based upon general understanding and might not show the most current updates or changes to the ERC. It is essential to consult with a tax expert or check out the official IRS site for the most up-to-date and accurate info regarding eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on salaries paid to all staff members whether they in fact worked or not. To put it simply, even if the.
workers worked full time and made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
permitted just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments however also a part of the expense of employer.
provided healthcare. Employee Retention Credit Carryback
Companies can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.