Lets talk first about Employee Retention Credit Nominal Effect :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always supply a lovely breakfast and have individuals truly learn about the program we must head to the space where we have the ability to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I indicate you understand if you simply begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I imply 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 validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
receive this you understand the check is opted for sure which’s when they pay so they do not pay anything till they in fact receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their savings account and they can really trust Wonder trust that the process has actually been completed and the number of you think you have actually processed because you started this we’re about 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 require 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 really important today the staff member retention credit which most of you have never heard of I certainly hadn’t heard of it until really recently and found out a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees in between five 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 challenging this isn’t like PPP we just phone your bank manager 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 us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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 cash payroll tax refund alright go on sorry I simply have to make sure we got that point I mean that’s a huge difference a loan versus money money I like money money that’s what we’re speaking about 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 lovely tough check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that person had to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have actually owned an organization but it’s based upon you having W-2 staff members 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 eligible 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 proper so there were six quarters the program was open well stroll us through the 6 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 need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caution here the PPP money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere 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 employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the huge concern is why does nobody understand about this because appearance when I first heard about this when I first met Josh you understand I have actually got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make numerous many investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I do not believe it since 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 survive throughout the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader 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 information out there then a bunch of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you understand 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was turmoil since remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it previously 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 ever 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 working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have worked with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose company is totally or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is completely 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 equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing support usually supply know-how and support to help organizations browse the intricate process of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Nominal Effect
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can claim, they can assist identify.
Documents and Computation: ERC filing services will help in collecting the needed documents, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based on eligible earnings and other qualifying 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 recognize possible chances for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the needed kinds and paperwork on your behalf. This includes finishing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These business remain upgraded with the latest changes and ensure that your filings abide by the most existing guidelines. If the Internal revenue service demands extra details or conducts an audit related to your ERC claim, they can also provide continuous assistance.
It’s important to research study and vet any business using ERC filing help to ensure their credibility and know-how. Try to find recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax professionals who use ERC submitting assistance.
Keep in mind that while these companies can provide important help, it’s constantly a good concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to retain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers need to meet one of two criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned previously, for 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of certified wages paid to staff members, including specific health plan 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 received an Income Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the employer.
It is very important to note that the ERC provisions and eligibility requirements have actually developed with time. The very best course of action is to seek advice from a tax professional or visit the main IRS website for the most current and in-depth info concerning the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a service needs to satisfy one of the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and services that got a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC involves completing the needed forms and including the credit on your work income tax return (usually Type 941). The exact time it requires to process the credit can vary based on a number of factors, consisting of the complexity of your organization and the work of the IRS. It’s advised to speak with a tax expert for assistance particular to your situation.
There are a number of business that can help with the process of declaring the ERC. Some widely known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or go to the official IRS website for the most precise and up-to-date info regarding eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
workers worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply cash payments however also a portion of the expense of company.
offered healthcare. Employee Retention Credit Nominal Effect
Employers can be right away reimbursed for the credit by decreasing the quantity of payroll taxes they.