Lets talk first about Employee Retention Credit Expansion :
Our group here what do these people doing everybody in this space is assisting teach individuals about ERC and uh always provide a stunning breakfast and have people actually find out about the program we should head to the room where we have the ability to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I mean you know if you simply 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 imply it’s just I indicate consider 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 verified the numbers are validated 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 know when you
get this you know the check is chosen sure and that’s when they pay so they do not pay anything till they in fact receive the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their savings account and they can genuinely trust Wonder trust that the process has actually been ended up and the number of you believe you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require you require 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 employee retention credit which most of you have never heard of I definitely hadn’t heard of it until extremely just recently and learned a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 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 become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to learn all about it let’s talk employee 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 provided companies 3 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I just need to ensure we got that point I mean that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re speaking about fine 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 beautiful hard check in the mail where you get actual cash from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s staff member retention credit that person needed to be an employee 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 employees right you needed to have actually owned a company but it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 six months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of seven thousand per quarter how did that happen um they simply 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 as much as 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 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of money it is now there’s a caution here the PPP cash would have to be decreased 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 usually Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city 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 substantial undoubtedly now the huge concern is why does no one learn about this because look when I first heard about this when I initially fulfilled Josh you understand I have actually got great deals of investments in lots of business I’m a significant supporter for entrepreneurship in America and make numerous many investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t think it since I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t understand about it I indicate that’s how you understand that’s how false information is that there’s no info out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody know about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin because in the PPP loan process 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 big 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 procedure process that’s all um and here there was chaos because keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you might not do 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 made it clear to any person about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge huge business customers have actually dealt with bottom line to recuperate other government programs we have actually 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 employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, company whose business is totally or partly suspended.
decline by more than 50%.
Availability.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end 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 incomes paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether a company had, usually, more or less than.
100 employees in 2019.
Business that specialize in ERC filing support usually supply expertise and assistance to assist services browse the complex process of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Expansion
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on factors such as your market, profits, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can declare, they can assist figure out.
Documents and Computation: ERC filing services will assist in gathering the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit quantity based upon eligible salaries and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can examine your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have evolved in time. These companies stay upgraded with the current changes and make sure that your filings adhere to the most present guidelines. If the Internal revenue service requests extra info or conducts an audit associated to your ERC claim, they can likewise supply continuous assistance.
It is necessary to research and vet any company providing ERC filing support to guarantee their trustworthiness and know-how. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who provide ERC filing assistance.
Keep in mind that while these business can supply valuable support, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee accurate 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 motivate businesses to retain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies should fulfill one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out earlier, for 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified salaries paid to staff members, including certain health plan expenditures. 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, organizations that got an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. However, the exact same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, allowing eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Kind 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have progressed over time. The very best strategy is to seek advice from a tax expert or go to the main IRS website for the most current and in-depth info regarding the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, an organization needs to satisfy one of the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes completing the essential types and consisting of the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can differ based on several elements, including the complexity of your service and the workload of the internal revenue service. It’s suggested to talk to a tax professional for assistance particular to your circumstance.
There are numerous companies that can help with the process of declaring the ERC. Some widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based on basic knowledge and may not reflect the most current updates or changes to the ERC. It’s important to talk to a tax expert or check out the main internal revenue service site for the most precise and updated details relating to eligibility, declaring treatments, and available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on salaries paid to all staff members whether they actually worked or not. To put it simply, 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 workers typically in 2019, then the credit is.
enabled only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not just money payments however likewise a portion of the cost of company.
supplied health care. Employee Retention Credit Expansion
Payment.
Employers can be right away repaid for the credit by reducing the amount of payroll taxes they.