Lets talk first about Employee Retention Credit Irs Audit :
Our team 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 people truly learn more about the program we should head to the space where we are able 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 hundreds of countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I imply you understand if you just begin to take a 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 imply it’s simply I mean think about how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is gone for sure which’s when they pay so they do not pay anything until they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is validated 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 completed and the number of you believe you’ve processed since 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 which’s what you require you require specialists 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 talking about something really important today the employee retention credit which most of you have actually never ever heard of I definitely had not heard of it up until really just recently and found out 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 5 and five hundred so I have actually got the specialist 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 not easy this isn’t like PPP we just call your bank manager and say provide 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 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 worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund fine go on sorry I just have to make sure we got that point I suggest that’s a big difference a loan versus money money I like money money that’s what we’re discussing all right 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 difficult 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 employee retention credit that individual needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have actually owned a business but it’s based on you having W-2 workers 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 have to be on payroll for the very first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact 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 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 mayhem 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 approximately 5 thousand Max and then what takes place 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 six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caveat here the PPP cash would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big question is why does no one understand about this since appearance when I first became aware of this when I first met Josh you understand I’ve got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make numerous many financial investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it because I utilize the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them carefully 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 pals Guv Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin because 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 big 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 simply procedure procedure 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 original program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever 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 ever done it in the past 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 before unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance 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 encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings varies by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that focus on ERC filing support normally supply expertise and assistance to assist organizations browse the complex procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Irs Audit
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can claim, they can assist figure out.
Documentation and Calculation: ERC filing services will assist in gathering the essential documents, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit quantity based upon qualified earnings 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 potential chances for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the necessary forms and documents in your place. This consists of finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have actually developed with time. These business stay updated with the latest modifications and guarantee that your filings abide by the most existing guidelines. They can likewise provide continuous assistance if the IRS demands extra details or carries out an audit related to your ERC claim.
It is necessary to research and veterinarian any company providing ERC filing support to guarantee their reliability and knowledge. Search for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax professionals who provide ERC filing support.
Keep in mind that while these business can offer valuable support, it’s constantly a good idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate businesses to maintain and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, employers must satisfy one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As discussed earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the exact 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% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: 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 (approximately 70%) of qualified salaries paid to workers, including particular health plan expenditures. The maximum 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 Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they got a PPP loan. Nevertheless, the exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, permitting eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, typically Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC arrangements and eligibility requirements have progressed gradually. The very best strategy is to consult with a tax expert or go to the official IRS site for the most comprehensive and updated info concerning the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a business needs to meet one of the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant 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.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and companies that received a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC includes finishing the required kinds and including the credit on your work tax return (generally Form 941). The exact time it takes to process the credit can vary based upon several factors, including the complexity of your service and the work of the internal revenue service. It’s advised to speak with a tax expert for assistance particular to your situation.
There are a number of companies that can aid with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll provider. Some widely known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these companies directly to inquire about their services and costs.
Please note that the info supplied here is based on basic knowledge and might not reflect the most recent updates or modifications to the ERC. It is very important to consult with a tax expert or go to the main IRS website for the most accurate and current info regarding eligibility, claiming treatments, and readily available help.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on incomes paid to all employees whether they actually worked or not. In other words, even if the.
workers worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
permitted just for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments however also a part of the expense of employer.
offered healthcare. Employee Retention Credit Irs Audit
Companies can be immediately reimbursed for the credit by decreasing the quantity of payroll taxes they.