Lets talk first about Employee Retention Credit Criteria :
Our team here what do these people doing everybody in this space is helping teach individuals about ERC and uh always offer a beautiful breakfast and have individuals really discover the program we should head to the room where we are able to display a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I imply you understand if you just start to look at some 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 mean consider how many actual clients that went through the program yeah this is the very end this is the party 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 client so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the process has actually been completed and how many you think you’ve processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 truly important today the employee retention credit which most of you have actually never ever become aware of I certainly had not become aware of it until extremely recently and found out a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call up 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 have actually become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to discover everything 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 created the cares Act and the cares act offered services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction 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 fine go on sorry I just need to make sure we got that point I suggest that’s a big 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 initial cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get real 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 worker retention credit that individual had to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have actually owned a business however it’s based upon you having W-2 workers 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 need 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 stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part money just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the mayhem 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 approximately 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caution here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten 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 workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the huge question is why does nobody understand about this since appearance when I initially became aware of this when I first fulfilled Josh you know I’ve got great deals of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I do not think it since I utilize 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 should have and we used them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even called to my political leader buddies Guv Senators they didn’t know about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one understand about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin because in the PPP loan process the federal government made it extremely 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 process that’s all um and here there was chaos due to the fact that remember in the original cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial 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 ever 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 done it before 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 accountant no your accounting professional’s never done this prior to unless you have an account that went into this service and bottom line my company Kevin has been in business considering that 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge corporate clients have dealt with bottom line to recuperate other federal government programs we have actually 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 government programs.
The staff member 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 up to $10,000 in earnings paid by an.
company whose business is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partly 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 similar quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings differs by whether a company had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing help normally supply know-how and support to assist services navigate the complicated procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Criteria
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you meet the requirements for the credit and recognize the maximum credit amount you can claim, they can help identify.
Paperwork and Calculation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial statements, to support your claim. They will also assist determine the credit quantity based on eligible incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the required types and paperwork in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have evolved gradually. These business stay updated with the latest changes and guarantee that your filings abide by the most existing standards. They can also offer ongoing support if the IRS demands additional details or carries out an audit related to your ERC claim.
It is necessary to research study and veterinarian any business providing ERC filing support to ensure their reliability and expertise. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax specialists who provide ERC submitting support.
Bear in mind that while these business can supply important assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to retain and pay their employees throughout 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 employers, including for-profit organizations, tax-exempt companies, and particular governmental entities. To certify, companies should fulfill one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As discussed earlier, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of qualified incomes paid to employees, consisting of certain health plan expenditures. 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 received a Paycheck Protection 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 exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, allowing eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, generally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually evolved with time. The best strategy is to talk to a tax expert or go to the main IRS site for the most detailed and current details relating to the ERC, including any recent legal changes or updates.
To get approved for the ERC, a service must meet among the following criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC involves completing the needed forms and consisting of the credit on your employment income tax return (typically Form 941). The exact time it requires to process the credit can differ based upon several aspects, including the complexity of your service and the workload of the internal revenue service. It’s advised to consult with a tax professional for guidance particular to your circumstance.
There are a number of business that can assist with the procedure of claiming the ERC. Some well-known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based upon basic knowledge and may not show the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or check out the main internal revenue service site for the most accurate and up-to-date information regarding eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the employer had 100 or less staff members 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 got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted only for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a part of the expense of company.
provided healthcare. Employee Retention Credit Criteria
Companies can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.