Lets talk first about Employee Retention Credit Section 207 :
Our group here what do these people doing everyone in this space is helping teach people about ERC and uh always supply a beautiful breakfast and have individuals truly learn more about the program we must head to the space where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I suggest you understand if you just begin to 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 mean it’s just I imply consider 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 validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you know the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually receive the money they do not pay bottom line Wonder trust anything 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 been ended up and how many you believe you’ve processed since you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you need you require 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 actually important today the worker retention credit which most of you have actually never become aware of I certainly hadn’t heard of it until really just recently and found out a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 just call up your bank manager and say give me a loan it does not 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’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided 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 difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund all right go on sorry I simply need to make sure we got that point I imply that’s a big difference a loan versus cash cash I like cash money 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 lovely difficult check in the mail where you get actual money from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that person needed to be an employee 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 employees right you had to have actually owned a company but it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 appropriate so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite part money 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 exact Kevin is 50 of the employee’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus due to the fact that the chaos 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 approximately five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash 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 workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big clearly now the huge question is why does no one understand about this since look when I first heard about this when I initially fulfilled Josh you know I have actually got lots of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many many financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I do not think it since I utilize the PPP we went through the cash 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 should have and we used them carefully to survive throughout 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 understand about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 process that’s all um and here there was turmoil because keep in mind in the original cares act you could not do 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 not doing ERC since 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 truly 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 business your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this company and bottom line my company Kevin has stayed in business given that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness 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 motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, company whose organization is fully or partly suspended.
decrease by more than 50%.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether a company had, typically, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support typically offer know-how and assistance to assist businesses navigate the intricate process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Section 207
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you fulfill the requirements for the credit and determine the optimum credit amount you can declare, they can help figure out.
Documents and Computation: ERC filing services will help in gathering the required documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit quantity based on qualified wages and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to determine possible chances for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the required kinds and documentation on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have evolved gradually. These business stay updated with the most recent changes and make sure that your filings abide by the most existing standards. If the IRS requests extra information or carries out an audit associated to your ERC claim, they can also supply continuous assistance.
It is essential to research study and veterinarian any business providing ERC filing support to ensure their trustworthiness and expertise. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who offer ERC submitting support.
Remember that while these companies can offer important support, it’s always a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate organizations to maintain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies need to fulfill one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As discussed previously, for 2021, a significant decline is specified as a 20% decline 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 receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away 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 (as much as 70%) of certified salaries paid to staff members, consisting of particular health plan costs. The optimum 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 a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. Nevertheless, 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 boosted, allowing eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually progressed over time. The best course of action is to talk to a tax expert or go to the official IRS website for the most current and detailed info regarding the ERC, including any recent legal changes or updates.
To qualify for the ERC, a service should meet among the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a considerable decrease 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 defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and services that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC includes completing the needed kinds and including the credit on your work tax return (normally Form 941). The exact time it takes to process the credit can differ based upon a number of aspects, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s recommended to seek advice from a tax expert for assistance specific to your circumstance.
There are several business that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these companies directly to ask about their fees and services.
Please keep in mind that the information offered here is based on basic knowledge and may not reflect the most recent updates or changes to the ERC. It is necessary to speak with a tax expert or visit the main IRS site for the most updated and precise details relating to eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on earnings paid to all staff members whether they actually worked or not. Simply put, even if the.
staff members worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
allowed just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments however likewise a portion of the cost of employer.
supplied healthcare. Employee Retention Credit Section 207
Companies can be immediately reimbursed for the credit by reducing the quantity of payroll taxes they.