Lets talk first about Employee Retention Credit Nonrefundable :
Our group here what do these people doing everybody in this room is helping teach people about ERC and uh always offer a gorgeous breakfast and have people truly find out about the program we should head to the room where we are able to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I imply you know if you simply begin to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I suggest think about 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 validated 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’re able to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything until they really receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their savings account and they can truly rely on Wonder trust that the procedure has actually been completed and how many you think you have actually processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you require you require professionals on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something actually crucial today the employee retention credit which the majority of you have actually never ever become aware of I definitely had not become aware of it up until really just recently and discovered a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members between five 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 just phone your bank manager and say offer me a loan it does not 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 spokesperson for this I enjoy this program it’s disappearing soon you got to discover all about it let’s talk staff member 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 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 big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money money payroll tax refund alright go on sorry I just have to make sure we got that point I suggest that’s a huge distinction a loan versus cash money I like cash 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 hard check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s employee retention credit that person needed to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have actually owned a business however 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 qualified 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 six quarters the program was open well stroll us through the six 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 need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’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 staff member’s income to an optimum of seven thousand per quarter how did that take place 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 staff members 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 then what happens 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 six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caveat here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members 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 question is why does no one learn about this due to the fact that appearance when I first became aware of this when I initially fulfilled Josh you know I’ve got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many many investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about 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 really easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my politician pals Governor Senators they didn’t know about it I indicate that’s how you know that’s how false information is that there’s no info out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one understand about the employee retention credit you know what’s interesting you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it extremely clear that if you wanted 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 process procedure that’s all um and here there was turmoil because remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never 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 accounting professional no your accounting professional’s never done this before unless you have an account that went into this service and bottom line my firm Kevin has actually stayed in business because 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have actually worked with bottom line to recover other federal 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 staff member 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 wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose organization is fully or partially suspended.
decrease by more than 50%.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
just two 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 fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, usually, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing support normally supply knowledge and support to help companies navigate the complicated procedure of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Nonrefundable
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based upon elements such as your market, earnings, and operations. They can assist identify if you satisfy the requirements for the credit and identify the optimum credit amount you can claim.
Documentation and Calculation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will also help determine the credit amount based upon eligible salaries and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary kinds and paperwork in your place. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved with time. These companies remain updated with the most recent changes and guarantee that your filings comply with the most existing guidelines. They can also provide ongoing assistance if the internal revenue service requests additional info or conducts an audit related to your ERC claim.
It’s important to research and vet any company providing ERC filing assistance to ensure their trustworthiness and proficiency. Look for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who provide ERC filing support.
Bear in mind that while these business can offer important assistance, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, companies must satisfy 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 decline in gross invoices. As pointed out previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined 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 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 portion (as much as 70%) of certified earnings paid to employees, including specific health insurance 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, services that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. The exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, normally Type 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have developed in time. The best strategy is to talk to a tax professional or visit the main internal revenue service site for the most current and comprehensive info regarding the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, an organization needs to meet one of the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the essential forms and consisting of the credit on your work income tax return (usually Kind 941). The exact time it requires to process the credit can vary based on numerous elements, consisting of the complexity of your organization and the work of the IRS. It’s advised to talk to a tax professional for guidance particular to your scenario.
There are numerous business that can help with the procedure of declaring the ERC. Some widely known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note 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 essential to talk to a tax professional or go to the main IRS website for the most accurate and up-to-date info concerning eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on incomes paid to all workers whether they in fact worked or not. Simply put, 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 employer had more than 100 staff members usually in 2019, then the credit is.
allowed only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments however also a part of the cost of company.
offered healthcare. Employee Retention Credit Nonrefundable
Companies can be instantly repaid for the credit by decreasing the amount of payroll taxes they.