Lets talk first about Employee Retention Credit During Pandemic :
Our group here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always offer a stunning breakfast and have people actually discover the program we ought to head to the room where we have the ability to display some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I mean you know if you simply 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 indicate it’s simply I imply think about the number of actual customers 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 verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you know when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything up until they actually get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank account and they can really rely on Wonder trust that the process has actually been completed and the number of you believe you have actually processed because 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 which’s what you require you need experts 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 Fantastic here you’re at my YouTube channel we’re talking about something actually crucial today the employee retention credit which the majority of you have never heard of I certainly hadn’t heard of it till really recently and learned a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have workers 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 Concepts 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 just contact 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 tell all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to discover everything about it let’s talk staff member 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 companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund all right go on sorry I just have to make certain we got that point I suggest that’s a big difference a loan versus cash money I like money money that’s what we’re speaking 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 original cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for workers right you had to have actually owned a service however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 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 during that duration now let’s talk my preferred part money how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because 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 approximately five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 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 caution here the PPP cash would have to be minimized 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 typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the big concern is why does no one learn about this since look when I initially became aware of this when I initially satisfied Josh you understand I have actually got great deals of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many many financial investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I do not believe it due to the fact that I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my political leader good friends Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a bunch of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody learn about the staff member retention credit you know what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process process 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 since keep in mind in the initial cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it previously 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 business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this service and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose organization is completely or partially suspended.
decline by more than 50%.
Availability.
1. The credit is available to all employers regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether a company had, on average, basically than.
100 employees in 2019.
Companies that specialize in ERC filing help typically offer competence and support to assist businesses navigate the complicated process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit During Pandemic
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based on factors such as your industry, income, and operations. They can help identify if you meet the requirements for the credit and determine the optimum credit amount you can claim.
Documents and Estimation: ERC filing services will assist in gathering the essential documentation, such as payroll records and monetary statements, to support your claim. They will also help determine the credit quantity based upon qualified wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can examine your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the required kinds and paperwork on your behalf. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have evolved with time. These companies stay updated with the most recent modifications and guarantee that your filings adhere to the most existing guidelines. They can also supply continuous assistance if the internal revenue service requests extra details or conducts an audit related to your ERC claim.
It is essential to research and veterinarian any business providing ERC filing support to guarantee their reliability and proficiency. Try to find recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who use ERC filing assistance.
Keep in mind that while these business can offer valuable support, it’s always a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to maintain 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 companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, companies need to meet one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As pointed out previously, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: 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 (as much as 70%) of certified wages paid to staff members, consisting of specific health insurance expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. Nevertheless, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling eligible companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Form 941. If the credit goes beyond the amount of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have actually developed in time. The best course of action is to speak with a tax expert or check out the main internal revenue service website for the most detailed and current information concerning the ERC, consisting of any recent legal changes or updates.
To receive the ERC, an organization needs to satisfy among the following requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a substantial decrease is specified 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% 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 readily available to organizations of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and services that received a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes finishing the required kinds and including the credit on your work income tax return (usually Form 941). The exact time it requires to process the credit can vary based upon numerous elements, including the complexity of your company and the work of the internal revenue service. It’s recommended to speak with a tax professional for guidance particular to your scenario.
There are several business that can aid with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some well-known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these companies straight to ask about their fees and services.
Please keep in mind that the info provided here is based upon basic understanding and might not show the most recent updates or modifications to the ERC. It is essential to seek advice from a tax expert or visit the main IRS website for the most current and precise info regarding eligibility, claiming procedures, and readily available help.
Less than 100. If the employer had 100 or less workers on average in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. To put it simply, even if the.
staff members worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees typically in 2019, then the credit is.
enabled only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments however also a portion of the cost of employer.
offered health care. Employee Retention Credit During Pandemic
Payment.
Employers can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.