Lets talk first about Employee Retention Credit How To File :
Our team here what do these guys doing everybody in this room is helping teach individuals about ERC and uh always provide a beautiful breakfast and have individuals really find out 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 numerous countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I imply you understand if you simply begin to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I imply think of how many 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the procedure has been ended up and how many you think you have actually processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually essential today the employee retention credit which most of you have never become aware of I certainly had not become aware of it up until very recently and learned a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 phone your bank supervisor and state offer me a loan it does not 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 become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund fine go on sorry I just have to make certain we got that point I mean that’s a huge distinction a loan versus money 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 initial cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get real cash from the IRS all right so let’s speak about 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 Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you needed to have actually owned a company however it’s based on you having W-2 staff members 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 have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part cash how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that 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 approximately 5 thousand Max and then what occurs 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 6 thousand dollars per worker that is because that’s a great deal of money it is now there’s a caution here the PPP cash would need to be decreased 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 typically Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant 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 clearly now the big concern is why does no one know about this due to the fact that look when I first found out about this when I first satisfied Josh you understand I have actually got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I do not believe it due to the fact that I utilize 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 utilized them sensibly to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even called to my politician pals Guv Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no information out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody know about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin since in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 procedure process that’s all um and here there was chaos due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually 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 since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before do the banks do it nope the banks don’t 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 entered into this organization and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate customers have actually dealt with bottom line to recover other federal government programs we’ve 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 created to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Because of COVID-19 or whose gross invoices, company whose business is completely or partially suspended.
decrease by more than 50%.
Availability.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether an employer had, on average, basically than.
100 staff members in 2019.
Business that specialize in ERC filing help typically supply know-how and assistance to assist businesses navigate the intricate procedure of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Employee Retention Credit How To File
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based on factors such as your industry, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can claim, they can assist identify.
Paperwork and Calculation: ERC filing services will assist in collecting the required documents, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit quantity based on qualified incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can review your previous payroll records and financials to identify prospective chances for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the needed kinds and paperwork in your place. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have actually developed gradually. These companies stay updated with the most recent modifications and make sure that your filings adhere to the most existing standards. If the IRS requests extra details or performs an audit related to your ERC claim, they can also offer ongoing support.
It is very important to research and veterinarian any company offering ERC filing support to guarantee their trustworthiness and proficiency. Search for established firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who use ERC submitting assistance.
Keep in mind that while these companies can supply important support, it’s constantly a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate businesses to keep and pay their employees throughout 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, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies should satisfy one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As pointed out previously, for 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts 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 amounts to a portion (as much as 70%) of qualified incomes paid to workers, consisting of specific 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: Initially, 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 enables companies to claim the ERC even if they received a PPP loan. However, the very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, enabling qualified companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Type 941. The excess can be refunded to the employer if the credit exceeds the amount of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually progressed with time. The best strategy is to speak with a tax expert or visit the main IRS site for the most up-to-date and comprehensive info concerning the ERC, consisting of any current legal changes or updates.
To receive the ERC, a business must fulfill among the following criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, 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 needed types and including the credit on your employment income tax return (usually Kind 941). The exact time it takes to process the credit can differ based on numerous factors, consisting of the complexity of your business and the workload of the internal revenue service. It’s recommended to seek advice from a tax expert for guidance particular to your circumstance.
There are several business that can assist with the procedure of declaring the ERC. Some well-known business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on basic knowledge and may not reflect the most recent updates or changes to the ERC. It’s important to talk to a tax professional or check out the official IRS website for the most up-to-date and accurate info concerning eligibility, declaring treatments, and readily available support.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on incomes paid to all workers whether they in fact worked or not. In other words, even if the.
staff members worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
enabled only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a portion of the cost of employer.
provided healthcare. Employee Retention Credit How To File
Payment.
Employers can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.