Lets talk first about Employee Retention Credit Quickbooks :
Our group here what do these guys doing everyone in this space is helping teach people about ERC and uh always supply a lovely breakfast and have individuals truly discover the program we need to head to the room where we are able 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 numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you just start 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 indicate it’s just I suggest consider how many actual clients 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 verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they in fact 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 deposit it into their checking account and they can really rely on Wonder trust that the process has actually been finished and the number of you think you’ve processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you need experts 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 important today the staff member retention credit which the majority of you have actually never heard of I certainly hadn’t heard of it till really just recently and found out a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank supervisor and say provide me a loan it does not 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 spokesperson for this I love this program it’s disappearing very soon you got to discover everything about it let’s talk staff member 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 used services 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 exactly so the ERC is a refund that’s.
remedy the cash money payroll tax refund okay go on sorry I simply have to make sure we got that point I suggest that’s a huge difference a loan versus money 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual needed to be an employee so I’m going to make the Presumption 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 actually owned an organization but it’s based upon you having W-2 workers in America not 10.99. so 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 need to be on payroll for the 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 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout that period 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 specific Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the chaos of the pandemic so they wished 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 up to five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of money it is now there’s a caution here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around ten 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 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 big clearly now the big concern is why does no one learn about this due to the fact that look when I first became aware of this when I initially met Josh you know I’ve got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous numerous investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t think it because I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we utilized them wisely to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t understand about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one know about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin since in the PPP loan procedure 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 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 chaos due to the fact that keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you could not do ERC in the original 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 anyone about how to.
do this does your CFO understand how to do this not actually he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and utilize tax unemployment tax work chance 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.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose service is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers no matter size including 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 employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries differs by whether a company had, typically, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help generally offer knowledge and support to help services browse the complicated process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Quickbooks
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based on aspects such as your industry, profits, and operations. They can help figure out if you meet the requirements for the credit and determine the maximum credit quantity you can claim.
Documentation and Estimation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit quantity based on qualified wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the needed types and documentation in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have evolved gradually. These business remain updated with the most recent changes and ensure that your filings abide by the most existing guidelines. If the IRS requests extra info or performs an audit associated to your ERC claim, they can likewise provide ongoing assistance.
It is very important to research and vet any company offering ERC filing assistance to ensure their trustworthiness and knowledge. Search for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who use ERC filing support.
Bear in mind that while these companies can provide valuable help, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure accurate 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 organizations to retain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies must satisfy one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As mentioned previously, for 2021, a considerable 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 specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices 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 quantity amounts to a portion (as much as 70%) of certified wages paid to staff members, consisting of particular 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: Initially, services that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. However, the same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, enabling qualified employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to modify prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually evolved in time. The very best strategy is to consult with a tax professional or go to the official IRS website for the most in-depth and up-to-date details concerning the ERC, including any current legislative modifications or updates.
To receive the ERC, an organization must meet one of the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and businesses that got a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC includes finishing the necessary types and consisting of the credit on your employment tax return (generally Type 941). The exact time it requires to process the credit can differ based on several factors, consisting of the complexity of your organization and the workload of the internal revenue service. It’s advised to talk to a tax expert for assistance particular to your scenario.
There are several business that can assist with the process of declaring the ERC. Some widely known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based on basic understanding and may not reflect the most current updates or modifications to the ERC. It is essential to speak with a tax professional or visit the main IRS website for the most updated and accurate details relating to eligibility, claiming procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on salaries paid to all staff members whether they really worked or not. To put it simply, even if the.
staff members 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 staff members on average in 2019, then the credit is.
permitted only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but also a portion of the expense of employer.
provided healthcare. Employee Retention Credit Quickbooks
Employers can be right away repaid for the credit by lowering the amount of payroll taxes they.