Lets talk first about Employee Retention Credit Qualification :
Our group here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh always offer a lovely breakfast and have individuals actually learn about the program we need to head to the space where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I imply you understand if you just begin to 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 imply it’s simply I indicate consider how many real customers 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything up until they actually receive the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their bank account and they can genuinely rely on Wonder trust that the process has been ended up and the number of you think you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 discussing something really crucial today the staff member retention credit which most of you have actually never ever heard of I certainly hadn’t become aware of it up until really just recently and learned a lot about it due to the fact that this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply contact your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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.
fix the cash money payroll tax refund okay go on sorry I simply need to make certain we got that point I suggest that’s a big distinction a loan versus cash cash I like money 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 lovely tough check in the mail where you get real money from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s worker retention credit that person needed to be an employee 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 employees right you had to have owned an organization however it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 staff members 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 2 three and 4 of 2020 and you had quarters one 2 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 preferred part money 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 worker’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the chaos of the pandemic so they wanted 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 as much as five 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 six thousand dollars per worker that is since that’s a lot of money it is now there’s a caveat 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 money someplace around 10 thousand dollars an individual so let’s state 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 IRS so it’s big certainly now the huge question is why does no one learn about this because look when I initially found out about this when I initially fulfilled Josh you know I have actually got lots of investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous many investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I do not think it since 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 and that were well deserved and we used them sensibly to survive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP also not true 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 really clear that if you wanted 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 just process procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you could not do both programs so if you had actually done PPP you might refrain from doing 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 anyone 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 do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this company 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 government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have worked with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose service is completely or partly suspended because of COVID-19 or whose gross receipts.
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 city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether an employer had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing help usually supply proficiency and assistance to help companies navigate the intricate process of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Qualification
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based on elements such as your market, revenue, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can claim, they can assist figure out.
Documents and Calculation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based on eligible incomes and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to determine potential chances for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the necessary kinds and documentation on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually progressed over time. These business remain upgraded with the most recent modifications and guarantee that your filings comply with the most present guidelines. They can also supply continuous assistance if the IRS demands additional details or carries out an audit related to your ERC claim.
It is very important to research and veterinarian any business using ERC filing help to guarantee their credibility and know-how. Search for established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who offer ERC filing support.
Bear in mind that while these business can supply important assistance, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate companies to maintain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies must fulfill one of two requirements:.
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 pointed out previously, for 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified incomes paid to workers, including certain 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, businesses that received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. The very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, permitting eligible companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Form 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the company.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually developed in time. The best strategy is to consult with a tax expert or visit the official IRS website for the most current and comprehensive details concerning the ERC, including any recent legislative changes or updates.
To receive the ERC, a company should satisfy 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 decline in gross invoices. 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% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For example, government entities and companies that got a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC includes completing the essential forms and consisting of the credit on your employment income tax return (usually Form 941). The exact time it takes to process the credit can differ based upon several elements, including the intricacy of your service and the work of the internal revenue service. It’s suggested to seek advice from a tax professional for assistance particular to your circumstance.
There are numerous companies that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies directly to ask about their services and charges.
Please note that the info offered here is based upon general knowledge and might not show the most recent updates or changes to the ERC. It is essential to talk to a tax expert or visit the main IRS site for the most precise and updated information regarding eligibility, claiming treatments, and readily available support.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. To put it simply, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members typically in 2019, then the credit is.
allowed just for wages paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a portion of the expense of employer.
provided healthcare. Employee Retention Credit Qualification
Companies can be instantly compensated for the credit by lowering the quantity of payroll taxes they.