Lets talk first about Employee Retention Credit Explained :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals truly find out about the program we need to head to the space where we have the ability to display a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I suggest you understand if you simply begin 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 mean it’s just I mean think of how many real customers 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 verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you know when you
get this you know the check is gone for sure and that’s when they pay so they do not pay anything until they really receive the cash 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 savings account and they can really rely on Wonder trust that the procedure has been completed and the number of you believe you have actually processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you need experts 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 Terrific here you’re at my YouTube channel we’re discussing something actually essential today the employee retention credit which the majority of you have never ever heard of I certainly hadn’t heard of it till very 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 staff members between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call your bank supervisor and say give me a loan it doesn’t 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 representative for this I enjoy this program it’s going away soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I just need to make sure we got that point I indicate that’s a huge distinction a loan versus money cash I like money cash that’s what we’re talking 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 beautiful difficult check in the mail where you get real 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 staff member retention credit that individual had 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 owned a business but it’s based upon you having W-2 workers 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 eligible so you have to be on payroll in 2020 on the W-2 and you have 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 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the chaos 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 up to five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five 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 money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the big question is why does no one understand about this because appearance when I initially became aware of this when I first met Josh you understand I’ve got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of many investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t think it because 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 should have and we used them sensibly to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my politician buddies Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one learn about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin since in the PPP loan process 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 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 due to the fact that keep in mind in the initial cares act you might not do both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never 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 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 business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has stayed in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge business customers have actually worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose organization is fully or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that specialize in ERC filing assistance normally supply competence and support to assist services navigate the intricate procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Explained
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon factors such as your market, earnings, and operations. If you satisfy the requirements for the credit and identify the maximum credit amount you can declare, they can assist determine.
Documents and Estimation: ERC filing services will help in gathering the essential paperwork, such as payroll records and monetary statements, to support your claim. They will likewise help calculate the credit quantity based on eligible incomes and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can review your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the essential forms and documentation on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually developed gradually. These business stay upgraded with the current modifications and ensure that your filings abide by the most existing guidelines. If the IRS requests additional information or carries out an audit related to your ERC claim, they can likewise provide continuous assistance.
It’s important to research and veterinarian any company offering ERC filing support to guarantee their credibility and expertise. Look for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who offer ERC filing support.
Keep in mind that while these companies can provide important assistance, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate businesses to maintain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, employers should meet one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As discussed previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Amount: 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 qualified salaries paid to workers, consisting of certain health insurance expenditures. The optimum credit per worker 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 Defense 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 received a PPP loan. Nevertheless, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, permitting eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Kind 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC arrangements and eligibility requirements have actually developed over time. The best strategy is to speak with a tax expert or go to the main IRS website for the most up-to-date and detailed details relating to the ERC, including any recent legislative modifications or updates.
To receive the ERC, a service needs to meet among the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that received a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC includes completing the needed forms and consisting of the credit on your employment income tax return (generally Type 941). The exact time it requires to process the credit can vary based upon a number of factors, including the complexity of your company and the work of the internal revenue service. It’s suggested to consult with a tax professional for assistance particular to your situation.
There are numerous business that can assist with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll provider. Some popular business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these business straight to ask about their fees and services.
Please note that the info offered here is based on general understanding and might not reflect the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or go to the main IRS website for the most accurate and up-to-date details concerning eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on wages paid to all staff members whether they in fact worked or not. To put it simply, even if the.
workers worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
allowed only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not just money payments but likewise a portion of the expense of employer.
provided health care. Employee Retention Credit Explained
Companies can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.