Lets talk first about Employee Retention Credit Example Business Reputation & Marketing Solutions :
Our group here what do these people doing everyone in this space is helping teach people about ERC and uh constantly provide a beautiful breakfast and have individuals really discover the program we ought to head to the space where we are able 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 numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I suggest you understand if you simply begin to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I suggest think about the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are confirmed 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
receive this you understand the check is opted for sure and that’s when they pay so they don’t pay anything till they actually get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their savings account and they can truly trust Wonder trust that the process has actually been completed and how many you think you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you need you need specialists 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 Wonderful here you’re at my YouTube channel we’re discussing something actually crucial today the staff member retention credit which most of you have never ever become aware of I certainly had not become aware of it until very just recently and discovered 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 staff members between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest 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 say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 going away soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three chances 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 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I just have to make sure we got that point I mean that’s a big distinction a loan versus cash money I like money money 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 original cares Act is the ERC and yes Kevin it is a gorgeous tough check in the mail where you get actual money from the IRS 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 needed to be a worker so I’m going to make the Assumption 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 business but it’s based upon you having W-2 employees 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 eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return 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 staff member’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 worker’s wage to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus since 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 approximately 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create 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 cash it is now there’s a caution here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 IRS so it’s huge obviously now the big question is why does nobody understand about this due to the fact that look when I first heard about this when I first satisfied Josh you know I have actually got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in business owners of which numerous suffered through the pandemic when I first became aware of 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 really easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them sensibly to stay alive during the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my politician buddies Guv Senators they didn’t learn about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody know about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was chaos because keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might not do ERC in the initial 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 made it clear to anyone about how to.
do this does your CFO know how to do this not really she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has stayed in business considering that 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 lot of our big big business clients have worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
employer whose organization is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Availability.
1. The credit is readily available to all companies no matter size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying salaries differs by whether an employer had, typically, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing assistance typically supply proficiency and support to help businesses navigate the intricate process of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Example Business Reputation & Marketing Solutions
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based on elements such as your market, earnings, and operations. They can help identify if you fulfill the requirements for the credit and determine the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and monetary statements, to support your claim. They will likewise help compute the credit quantity based on eligible wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the essential types and documentation in your place. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have evolved with time. These business stay updated with the current modifications and ensure that your filings adhere to the most current standards. If the Internal revenue service requests additional information or conducts an audit related to your ERC claim, they can also supply ongoing support.
It’s important to research and vet any company providing ERC filing support to guarantee their trustworthiness and expertise. Look for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who use ERC submitting assistance.
Bear in mind that while these business can offer valuable support, it’s always a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to keep and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit services, tax-exempt companies, and particular governmental entities. To certify, employers must meet one of two criteria:.
The business operations were fully 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 considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified incomes paid to staff members, including particular health plan expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. The exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, generally Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the employer.
It is necessary to note that the ERC provisions and eligibility requirements have developed over time. The best course of action is to speak with a tax expert or go to the main internal revenue service site for the most current and in-depth details regarding the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, an organization needs to satisfy among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, federal government entities and services that received a PPP loan might have constraints on declaring the credit.
The procedure for declaring the ERC includes completing the required kinds and including the credit on your work income tax return (generally Kind 941). The exact time it takes to process the credit can differ based on several aspects, consisting of the complexity of your service and the work of the IRS. It’s recommended to talk to a tax expert for guidance specific to your scenario.
There are a number of companies that can assist with the procedure of declaring the ERC. Some popular companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based on general understanding and might not show the most recent updates or modifications to the ERC. It’s important to seek advice from a tax professional or check out the main IRS site for the most accurate and up-to-date information concerning eligibility, claiming procedures, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on earnings paid to all workers whether they actually worked or not. Simply put, 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 company had more than 100 employees typically in 2019, then the credit is.
enabled just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “earnings” consists of not just cash payments but also a part of the expense of employer.
provided health care. Employee Retention Credit Example Business Reputation & Marketing Solutions
Payment.
Companies can be right away compensated for the credit by minimizing the quantity of payroll taxes they.