Lets talk first about Employee Retention Credit Eligibility Requirements :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh constantly provide a beautiful breakfast and have people actually learn more about the program we should head to the space where we have the ability to display a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars actually 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 simply start to take a 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 imply think of how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything till they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they deposit it into their checking account and they can genuinely rely on Wonder trust that the procedure has actually been ended up and the number of you think you’ve processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you require professionals 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 talking about something actually essential today the staff member retention credit which the majority of you have never heard of I certainly had not become aware of it till very recently and learned a lot about it due to the fact that this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees 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 Ideas 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 phone your bank manager and say give me a loan it does not 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’ve become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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 cash payroll tax refund fine go on sorry I just have to make sure we got that point I indicate that’s a big distinction a loan versus money cash I like money money that’s what we’re talking about all right 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 gorgeous hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works since it sounds 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 Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned a service but it’s based on you having W-2 employees 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 qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. all right 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 just how much can you return 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 wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus since the chaos of the pandemic so they wanted to even get more to keep those employees 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 after that what happens 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 six thousand dollars per staff member that is because that’s a lot of cash it is now there’s a caution here the PPP cash would need to be minimized from the twenty 6 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 cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city 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 substantial clearly now the big concern is why does no one learn about this because appearance when I initially became aware of this when I initially fulfilled Josh you know I’ve got great deals of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I don’t believe it since 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 used them sensibly to survive during the pandemic so when I found out about this I stated nah it can’t hold true however 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 information out there then a lot of individuals told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s interesting you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it very 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not 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 know how to do this not truly he or she’s never done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that went into this service and bottom line my company Kevin has actually stayed in business because 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
company whose business is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a similar 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 qualifying incomes paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether a company had, usually, more or less than.
100 workers in 2019.
Companies that focus on ERC filing assistance generally supply expertise and support to assist organizations browse the complex procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Eligibility Requirements
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based upon aspects such as your industry, income, and operations. They can assist determine if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Documents and Computation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary statements, to support your claim. They will likewise help calculate the credit quantity based upon eligible wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the necessary types and paperwork on your behalf. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have developed over time. These business remain updated with the latest changes and guarantee that your filings comply with the most current guidelines. They can likewise offer ongoing support if the internal revenue service requests extra details or performs an audit related to your ERC claim.
It is necessary to research and vet any company offering ERC filing assistance to guarantee their credibility and know-how. Try to find established firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who use ERC filing support.
Bear in mind that while these business can offer important support, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure precise filings.
The Worker 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 motivate services to retain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, employers must fulfill one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As pointed out previously, for 2021, a significant decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices 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 amounts to a percentage (up to 70%) of certified earnings paid to staff members, consisting of particular health insurance costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. Nevertheless, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, enabling eligible employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Type 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC provisions and eligibility requirements have progressed in time. The best course of action is to consult with a tax professional or go to the official IRS website for the most comprehensive and up-to-date information concerning the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, an organization needs to meet among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and businesses that got a PPP loan may have limitations on claiming the credit.
The process for declaring the ERC involves completing the needed kinds and including the credit on your work income tax return (normally Form 941). The exact time it takes to process the credit can differ based on several factors, consisting of the intricacy of your service and the workload of the internal revenue service. It’s suggested to talk to a tax expert for guidance particular to your situation.
There are numerous business that can aid with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some popular business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these companies directly to inquire about their costs and services.
Please keep in mind that the details offered here is based on basic understanding and may not reflect the most current updates or changes to the ERC. It is very important to consult with a tax professional or go to the main internal revenue service website for the most current and precise information relating to eligibility, declaring treatments, and available help.
Less than 100. If the company had 100 or less employees on average in 2019, then the credit is based.
on incomes paid to all workers whether they actually worked or not. Simply put, even if the.
employees worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
permitted only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments but likewise a part of the expense of company.
supplied healthcare. Employee Retention Credit Eligibility Requirements
Employers can be immediately compensated for the credit by lowering the amount of payroll taxes they.