Lets talk first about Employee Retention Credit Qualified Wages :
Our team here what do these people doing everyone in this space is helping teach people about ERC and uh constantly offer a stunning breakfast and have people truly find out 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 want to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I suggest you know if you just start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I indicate think about how many real customers 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 validated and the check is on the mail in the mail from the IRS heading to the client 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 don’t pay anything till they actually get the cash they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they transfer it into their checking account and they can really trust Wonder trust that the procedure has actually been completed and how many you believe 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 which’s what you need you need specialists 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 Fantastic here you’re at my YouTube channel we’re talking about something actually essential today the worker retention credit which the majority of you have never ever heard of I definitely hadn’t become aware of it up until really recently and learned a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply contact 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 inform all of us about it and how to get it and why I’ve 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 start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I just have to ensure we got that point I suggest that’s a big distinction a loan versus money cash I like cash cash 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member 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 individuals on the cap table not for investors it’s for staff members right you had to have actually owned a service however it’s based on 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 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 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part money how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the turmoil 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 approximately 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge certainly now the huge concern is why does no one learn about this since look when I first found out about this when I initially satisfied Josh you understand I’ve got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t think it due to the fact that I use 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 sensibly to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals 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 understand about the staff member retention credit you understand what’s interesting you’re talking about the banks Kevin because 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 big banks in our country 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 because 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 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 do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never done this prior to unless you have an account that went into this service and bottom line my firm Kevin has actually stayed in business since 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 great deal of our huge big business customers have dealt with bottom line to recuperate other federal government programs we’ve 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 employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, employer whose service is fully or partially suspended.
decline by more than 50%.
1. The credit is readily 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) small.
organizations 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 service is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, usually, basically than.
100 employees in 2019.
Business that focus on ERC filing help usually supply expertise and support to help businesses navigate the complicated process of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Qualified Wages
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based on aspects such as your market, revenue, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can declare, they can assist figure out.
Paperwork and Estimation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and financial statements, to support your claim. They will also assist determine the credit amount based upon qualified salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the required forms and paperwork on your behalf. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved with time. These business stay updated with the current modifications and ensure that your filings abide by the most present guidelines. They can likewise supply ongoing assistance if the internal revenue service requests extra info or carries out an audit related to your ERC claim.
It’s important to research and vet any business providing ERC filing assistance to ensure their reliability and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC submitting assistance.
Bear in mind that while these business can supply valuable support, it’s constantly a good idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure accurate filings.
The Staff Member 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 businesses to retain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To certify, employers must satisfy one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As pointed out earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices 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 certified incomes paid to employees, consisting of particular health insurance costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they received a PPP loan. The exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, permitting eligible companies to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies 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, typically Form 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the employer.
It’s important to note that the ERC arrangements and eligibility criteria have evolved with time. The best course of action is to seek advice from a tax expert or go to the official internal revenue service website for the most up-to-date and comprehensive details concerning the ERC, including any current legal changes or updates.
To receive the ERC, a business needs to fulfill one of the following criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline 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% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and organizations that got a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC involves completing the needed forms and including the credit on your employment income tax return (usually Type 941). The exact time it requires to process the credit can differ based upon several aspects, consisting of the complexity of your organization and the workload of the IRS. It’s recommended to consult with a tax expert for guidance specific to your situation.
There are several companies that can assist with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some popular companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these companies directly to ask about their fees and services.
Please note that the info supplied here is based upon general knowledge and might not show the most recent updates or changes to the ERC. It is essential to seek advice from a tax professional or visit the official IRS website for the most updated and accurate info regarding eligibility, claiming treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on incomes paid to all employees whether they really worked or not. In other words, even if the.
workers worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees typically in 2019, then the credit is.
enabled just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but also a portion of the expense of company.
supplied health care. Employee Retention Credit Qualified Wages
Employers can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.