Lets talk first about Employee Retention Credit Revenue Reduction :
Our group here what do these men doing everybody in this space is helping teach individuals about ERC and uh always provide a stunning breakfast and have individuals actually discover the program we must head to the room where we are able to show 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 countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I indicate you know if you just 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 suggest it’s simply I suggest 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 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 have the ability to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything until they in fact receive the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their bank account and they can really rely on Wonder trust that the procedure has been finished and the number of you think you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you require 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 Wonderful here you’re at my YouTube channel we’re talking about something truly important today the worker retention credit which most of you have actually never heard of I certainly hadn’t become aware of it up until very just recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have staff members 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact your bank supervisor and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed 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 nearly 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 money payroll tax refund fine go on sorry I simply have to make certain we got that point I imply that’s a huge difference a loan versus cash cash I like money cash that’s what we’re discussing 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 beautiful difficult check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s worker retention credit that individual had to be a staff member 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 had to have actually owned a company however it’s based upon you having W-2 staff members in America not 10.99. so 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 need 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 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the turmoil of the pandemic so they wanted to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty six 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 money it is now there’s a caution here the PPP money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment 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 substantial undoubtedly now the big concern is why does nobody know about this since look when I first became aware of this when I first satisfied Josh you understand I’ve got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which many suffered through the pandemic when I first 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 very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them wisely to survive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my political leader friends Governor 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 lot of individuals told 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 learn about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it very 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 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 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 might refrain from doing 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 government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not actually he or she’s never ever 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 company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge corporate customers have dealt with bottom line to recover other government programs we’ve done sales tax and use 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 employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose organization is completely or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether a company had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance generally provide proficiency and support to help businesses navigate the complex process of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Revenue Reduction
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based upon aspects such as your industry, income, and operations. They can assist identify if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Documents and Estimation: ERC filing services will help in gathering the required documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit amount based upon qualified earnings and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to recognize possible chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and submit the essential forms and paperwork on your behalf. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have evolved gradually. These business stay updated with the latest modifications and guarantee that your filings comply with the most present guidelines. If the Internal revenue service demands extra info or performs an audit associated to your ERC claim, they can likewise offer continuous assistance.
It is necessary to research study and veterinarian any business providing ERC filing support to guarantee their reliability and knowledge. Search for recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who use ERC submitting support.
Keep in mind that while these business can supply important help, it’s always an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate companies to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, companies should meet one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of certified wages paid to workers, consisting of certain 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: Initially, companies that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they received a PPP loan. Nevertheless, the exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, enabling eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, normally Form 941. The excess can be refunded to the company if the credit exceeds the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually progressed over time. The very best strategy is to consult with a tax professional or go to the main internal revenue service site for the most comprehensive and up-to-date info concerning the ERC, including any current legislative modifications or updates.
To qualify for the ERC, an organization should meet one of the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes completing the necessary forms and consisting of the credit on your employment tax return (normally Type 941). The exact time it requires to process the credit can differ based on numerous elements, consisting of the complexity of your business and the work of the IRS. It’s recommended to seek advice from a tax expert for assistance specific to your circumstance.
There are a number of business that can assist with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these business directly to inquire about their services and fees.
Please note that the info supplied here is based upon general knowledge and might not show the most recent updates or modifications to the ERC. It’s important to talk to a tax expert or check out the main internal revenue service website for the most up-to-date and accurate information regarding eligibility, claiming treatments, and readily available support.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on incomes paid to all workers whether they actually worked or not. In other words, even if the.
employees worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments however likewise a portion of the cost of company.
offered health care. Employee Retention Credit Revenue Reduction
Employers can be right away repaid for the credit by minimizing the quantity of payroll taxes they.