Lets talk first about Employee Retention Credit Common Ownership :
Our team here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh always supply a lovely breakfast and have people actually learn more about the program we ought to head to the space where we have the ability to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I imply you know if you just start 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 just I indicate think of the number of real clients that went through the program yeah this is the very end this is the party at the end when the check is validated 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
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they really receive the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their savings account and they can really trust Wonder trust that the procedure has actually been ended up and the number of you believe you’ve processed since you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you need professionals 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 discussing something actually essential today the worker retention credit which most of you have actually never heard of I definitely hadn’t heard of it until really recently and found out a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 just call your bank manager and say offer me a loan it does not 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 discover 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 created the cares Act and the cares act provided companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I just need to ensure we got that point I imply that’s a big difference a loan versus money cash I like money 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 initial cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual had to be a staff member so I’m going to make the Assumption this cash 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 company but it’s based on you having W-2 workers 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 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 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific 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 skyrocketed to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the chaos 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 five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city 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 huge undoubtedly now the huge question is why does nobody learn about this since look when I initially heard about this when I first fulfilled Josh you understand I have actually got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make numerous numerous financial investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not believe it since I use 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 which were well deserved and we utilized 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 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 lot of individuals 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 understand about the staff member retention credit you understand what’s intriguing you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it really clear that if you wanted 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 simply procedure procedure that’s all um and here there was turmoil because keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because 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 truly he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that went into this service and bottom line my firm Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose service is fully or partly suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion 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 is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages differs by whether a company had, typically, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing help usually supply proficiency and assistance to assist organizations browse the intricate procedure of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Common Ownership
Eligibility Evaluation: These companies will evaluate your organization’s eligibility for the ERC based on aspects such as your market, income, and operations. If you fulfill the requirements for the credit and determine the optimum credit amount you can claim, they can help figure out.
Documents and Computation: ERC filing services will help in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based upon qualified wages and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize prospective chances for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the essential forms and documentation on your behalf. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have evolved in time. These companies remain updated with the latest modifications and ensure that your filings adhere to the most present guidelines. They can likewise offer ongoing assistance if the IRS demands extra info or conducts an audit related to your ERC claim.
It is essential to research study and vet any business providing ERC filing help to ensure their reliability and expertise. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC submitting support.
Bear in mind that while these companies can offer valuable help, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to keep and pay their employees during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, companies should satisfy one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease 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 substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly 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 qualified salaries paid to employees, including specific health insurance costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received an Income Defense 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 received a PPP loan. However, the same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Form 941. The excess can be refunded to the employer if the credit goes beyond the quantity of employment taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have actually progressed gradually. The best course of action is to speak with a tax professional or visit the main IRS website for the most current and detailed information regarding the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a service must satisfy one of the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined 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 immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and services that received a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes completing the required forms and including the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can differ based on several elements, including the intricacy of your company and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your situation.
There are numerous business that can assist with the process of declaring the ERC. Some well-known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based upon general knowledge and may not show the most recent updates or modifications to the ERC. It is necessary to speak with a tax expert or check out the main IRS site for the most current and precise details regarding eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on wages paid to all employees whether they really worked or not. In other words, even if the.
employees worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments however also a portion of the cost of company.
provided health care. Employee Retention Credit Common Ownership
Employers can be right away repaid for the credit by lowering the quantity of payroll taxes they.