Lets talk first about Employee Retention Credit Rules 2022 :
Our group here what do these people doing everybody in this room is helping teach people about ERC and uh always supply a beautiful breakfast and have people actually learn about the program we should head to the room where we have the ability to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of 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 know if you simply begin to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I imply think of the number of actual clients 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 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 up until they really receive the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the procedure has been ended up and how many you think you’ve processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly 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 among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re discussing something truly essential today the worker retention credit which most of you have actually never ever heard of I certainly hadn’t become aware of it till extremely just recently and discovered a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 phone your bank supervisor and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund all right go on sorry I just need to make certain we got that point I indicate that’s a big difference a loan versus cash cash I like money money that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s employee retention credit that individual had 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 shareholders it’s for staff members right you needed to have owned a business but it’s based on you having W-2 workers 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my preferred part cash just how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 after that what takes place 21 000 Max in 2021 oh that’s how you come up with 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 because that’s a lot of money it is now there’s a caveat here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the huge question is why does nobody know about this due to the fact that appearance when I first became aware of this when I first met Josh you understand I have actually got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many lots of financial investments in business owners of which lots of suffered through the pandemic when I first heard 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 very easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my political leader pals Governor Senators they didn’t learn about it I suggest that’s how you know that’s how false information is that there’s no info out there then a bunch of people 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 no one learn about the staff member 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 very 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 process process that’s all um and here there was turmoil due to the fact that remember in the initial cares act you could refrain from doing both programs so if you had done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO understand how to do this not really she or he’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has been in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge big corporate customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member 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 incomes paid by an.
Since of COVID-19 or whose gross receipts, employer whose business is fully or partially suspended.
decrease by more than 50%.
Availability.
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) little.
companies who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of a comparable 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 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 varies by whether a company had, on average, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support generally provide competence and support to assist businesses navigate the complex process of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Rules 2022
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based on elements such as your market, revenue, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can claim, they can help figure out.
Documents and Computation: ERC filing services will help in gathering the needed documents, such as payroll records and monetary statements, to support your claim. They will also help compute the credit amount based on eligible earnings and other certifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the required forms and documentation in your place. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed in time. These companies stay updated with the latest changes and ensure that your filings comply with the most existing guidelines. They can likewise offer continuous support if the IRS requests extra information or conducts an audit related to your ERC claim.
It’s important to research study and vet any company offering ERC filing help to guarantee their credibility and proficiency. Search for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who offer ERC filing assistance.
Keep in mind that while these business can offer valuable help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and make sure 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 motivate companies to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit services, tax-exempt organizations, and certain governmental entities. To certify, employers need to meet one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As discussed previously, for 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of qualified salaries paid to employees, including certain health insurance expenses. 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, services that got an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. Nevertheless, the same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, permitting qualified employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be refunded to the employer if the credit surpasses the amount of work taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have progressed in time. The best course of action is to consult with a tax professional or go to the official internal revenue service site for the most comprehensive and current info concerning the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, an organization must satisfy one of the following criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease 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 right away preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and organizations that got a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC includes completing the essential types and consisting of the credit on your employment tax return (usually Form 941). The exact time it takes to process the credit can differ based on several factors, including the intricacy of your company and the workload of the internal revenue service. It’s suggested to consult with a tax professional for guidance particular to your situation.
There are numerous companies that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these business straight to inquire about their costs and services.
Please keep in mind that the information provided here is based upon basic knowledge and might not reflect the most current updates or changes to the ERC. It’s important to talk to a tax expert or go to the official internal revenue service site for the most up-to-date and precise information concerning eligibility, declaring procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on salaries paid to all staff members whether they in fact worked or not. In other words, 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 company had more than 100 employees typically in 2019, then the credit is.
allowed only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not just money payments however likewise a portion of the expense of company.
provided health care. Employee Retention Credit Rules 2022
Payment.
Companies can be right away repaid for the credit by minimizing the quantity of payroll taxes they.