Lets talk first about Employee Retention Credit Revenue Test :
Our group here what do these people doing everybody in this space is assisting teach people about ERC and uh constantly offer a beautiful breakfast and have individuals really find out about the program we need to head to the room where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I mean you understand if you just begin 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 suggest it’s simply I indicate think about how many real clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed 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 know when you
receive this you know the check is opted for sure which’s when they pay so they do not pay anything up until they really receive the money they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their savings account and they can genuinely rely on Wonder trust that the process has actually been ended up and how many you think you’ve processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you require you need 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 discussing something really important today the employee retention credit which the majority of you have never ever heard of I definitely had not heard of it until really recently and found out a lot about it because this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just contact your bank manager and state offer 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund okay go on sorry I simply have to make sure we got that point I mean that’s a huge distinction a loan versus money cash I like money cash that’s what we’re talking about okay 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 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 had to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have owned a service however it’s based upon you having W-2 employees 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 need 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 correct so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s income to a maximum 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 a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 as much as five thousand Max and then what takes place 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 employee that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be lowered 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 typically Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York 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 internal revenue service so it’s big undoubtedly now the huge question is why does nobody know about this due to the fact that appearance when I initially heard about this when I initially satisfied Josh you know I have actually got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many lots of investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I do not think it since 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 been worthy of and we utilized them wisely to survive during the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even contacted us to my politician buddies 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 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 learn about the staff member retention credit you know what’s fascinating you’re discussing 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was mayhem since keep in mind in the original cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the original program and when they changed the law in 2021 the banks were not 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 anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before do the banks do it nope the banks do not 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 prior to unless you have an account that went into this company and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been working 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 clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose organization is fully or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Schedule.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, typically, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing assistance generally supply knowledge and support to help organizations browse the intricate procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Revenue Test
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based upon factors such as your industry, earnings, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can declare, they can help determine.
Paperwork and Computation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based on eligible salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize potential chances for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the required forms and paperwork in your place. This consists of completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have developed gradually. These business remain upgraded with the most recent changes and ensure that your filings comply with the most existing standards. If the Internal revenue service demands extra info or carries out an audit related to your ERC claim, they can likewise provide continuous support.
It is very important to research and veterinarian any company using ERC filing support to guarantee their credibility and proficiency. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who provide ERC filing support.
Bear in mind that while these business can provide important assistance, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and make sure accurate 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 procedures. The objective of the ERC is to encourage companies to maintain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, employers must fulfill one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline 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.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of certified salaries paid to workers, including certain health plan expenses. The optimum 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 received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. The exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing eligible companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, typically Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC provisions and eligibility requirements have actually progressed in time. The best course of action is to consult with a tax expert or go to the official internal revenue service site for the most detailed and current info relating to the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a service should satisfy among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and services that received a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves completing the required forms and consisting of the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon numerous elements, consisting of the complexity of your organization and the workload of the internal revenue service. It’s recommended to talk to a tax professional for assistance specific to your situation.
There are a number of companies that can assist with the procedure of declaring the ERC. Some popular business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on general knowledge and may not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or visit the main IRS site for the most accurate and current information regarding eligibility, declaring treatments, and available assistance.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on earnings paid to all workers whether they in fact 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. If the company had more than 100 workers on average in 2019, then the credit is.
allowed only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments however likewise a part of the cost of employer.
supplied health care. Employee Retention Credit Revenue Test
Payment.
Companies can be right away compensated for the credit by decreasing the quantity of payroll taxes they.