Lets talk first about Employee Retention Credit Ey :
Our group here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh always supply a gorgeous breakfast and have people truly discover the program we must head to the space where we are able to show a few of the checks that we are getting for business 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 duplicate copies of the letters that go to customers verifying that the check is on the method I imply you know if you just start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I indicate consider how many actual 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 internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything until they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their checking account and they can really rely on Wonder trust that the procedure has been finished and the number of you believe you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you need you need 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 discussing something actually essential today the employee retention credit which most of you have never ever become aware of I definitely hadn’t heard of it up until really recently and found out a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 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 tell all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I love 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 just start there so throughout 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 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 money payroll tax refund fine go on sorry I simply need to make certain we got that point I suggest that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re discussing 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 gorgeous hard 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 sounds like to me if it’s a if it’s employee retention credit that individual had to be a staff member 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 workers right you needed to have actually owned a business 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 eligible so you need to be on payroll in 2020 on the W-2 and you need 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 walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the turmoil 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 as much as 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the huge concern is why does no one understand about this due to the fact that appearance when I first heard about this when I first satisfied Josh you know I have actually got great deals of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous many investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I do not believe it because 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 which were well been worthy of and we used them sensibly to survive during the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even contacted us to my politician buddies Guv Senators they didn’t understand 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 told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one understand about the worker retention credit you know what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely 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 process procedure that’s all um and here there was turmoil since keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it in the past 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 company your accounting professional no your accountant’s never done this prior to unless you have an account that went into this company and bottom line my firm Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate clients have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose service is completely or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Accessibility.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for salaries 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 specialize in ERC filing support typically provide know-how and support to help organizations navigate the intricate process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Ey
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based on elements such as your industry, profits, and operations. If you meet the requirements for the credit and recognize the optimum credit quantity you can declare, they can help determine.
Documentation and Calculation: ERC filing services will help in gathering the necessary 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 costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize possible chances for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the essential forms and paperwork in your place. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have evolved gradually. These companies stay updated with the most recent modifications and ensure that your filings abide by the most existing standards. If the Internal revenue service requests extra details or conducts an audit related to your ERC claim, they can likewise offer ongoing assistance.
It is essential to research study and veterinarian any business offering ERC filing assistance to guarantee their reliability and competence. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who provide ERC filing assistance.
Keep in mind that while these business can provide important support, it’s always a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist 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 procedures. The goal of the ERC is to motivate organizations to maintain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To certify, companies need to fulfill one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As mentioned previously, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away 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 incomes paid to staff members, including 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: At first, services that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. The exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, allowing qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC provisions and eligibility requirements have evolved in time. The very best course of action is to speak with a tax expert or check out the official IRS website for the most in-depth and up-to-date information relating to the ERC, including any recent legal modifications or updates.
To qualify for the ERC, an organization should satisfy one of the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined 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 immediately preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and services that got a PPP loan might have constraints on declaring the credit.
The procedure for declaring the ERC includes completing the needed forms and including the credit on your work tax return (usually Kind 941). The exact time it takes to process the credit can vary based on a number of aspects, consisting of the intricacy of your business and the work of the IRS. It’s recommended to speak with a tax professional for guidance specific to your circumstance.
There are a number of companies that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and get in touch with these companies directly to ask about their services and costs.
Please keep in mind that the info provided here is based on general knowledge and may not reflect the most current updates or modifications to the ERC. It is essential to seek advice from a tax professional or check out the official IRS website for the most accurate and current info relating to eligibility, claiming treatments, and available help.
Less than 100. If the company had 100 or fewer employees usually in 2019, then the credit is based.
on incomes paid to all workers whether they in fact worked or not. To put it simply, even if the.
workers worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
enabled just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments however also a portion of the cost of company.
supplied healthcare. Employee Retention Credit Ey
Payment.
Companies can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.