Lets talk first about Employee Retention Credit Suspension Test :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always supply a lovely breakfast and have people really find out about the program we should head to the room where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I indicate you understand if you just begin to take a look at a few 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 suggest consider the number of 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 consumer so that’s how you have the ability to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything up until they in fact receive the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their bank account and they can really rely on Wonder trust that the process has been finished and how many you believe you’ve processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you require specialists 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 Wonderful here you’re at my YouTube channel we’re speaking about something truly essential today the staff member retention credit which the majority of you have never heard of I definitely hadn’t become aware of it till really just recently and discovered a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I have actually 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 not easy this isn’t like PPP we just call up your bank manager and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund all right go on sorry I simply have to make certain we got that point I imply that’s a big 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 beautiful hard check in the mail where you get actual money from the IRS all right so let’s discuss 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 Presumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you had to have owned an organization however it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 workers 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 very first six 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 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the chaos 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 5 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 staff member that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the huge question is why does no one understand about this due to the fact that appearance when I first found out about this when I first satisfied Josh you know I’ve got great deals of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first found out 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 very easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my politician good friends Guv Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re talking 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was chaos due to the fact that remember in the initial cares act you might 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 because it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that went into this service and bottom line my company Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate clients have dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member 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 earnings paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Accessibility.
1. The credit is readily available to all companies no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar 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 qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing assistance typically offer competence and assistance to assist companies navigate the complicated procedure of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Suspension Test
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can assist figure out if you fulfill the requirements for the credit and determine the optimum credit quantity you can claim.
Paperwork and Calculation: ERC filing services will assist in collecting the needed documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit amount based upon qualified wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can review your past payroll records and financials to identify potential chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the necessary types and documents in your place. This includes finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have progressed over time. These business stay updated with the latest changes and ensure that your filings comply with the most existing guidelines. If the IRS demands extra information or carries out an audit associated to your ERC claim, they can also offer continuous support.
It is essential to research study and vet any company offering ERC filing assistance to ensure their reliability and expertise. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who use ERC submitting assistance.
Bear in mind that while these companies can supply important assistance, it’s constantly a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to retain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To certify, companies need to fulfill one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of qualified incomes paid to staff members, including certain health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, enabling qualified employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Kind 941. If the credit goes beyond the amount of employment taxes owed, the excess can be refunded to the company.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually evolved over time. The best course of action is to seek advice from a tax expert or check out the official internal revenue service website for the most detailed and up-to-date details relating to the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a service should fulfill one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the essential kinds and consisting of the credit on your employment tax return (usually Type 941). The exact time it takes to process the credit can differ based on numerous aspects, including the intricacy of your business and the work of the internal revenue service. It’s recommended to consult with a tax professional for assistance specific to your circumstance.
There are several companies that can help with the process of declaring the ERC. Some well-known companies that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on general understanding and might not show the most current updates or changes to the ERC. It’s important to speak with a tax expert or check out the official IRS website for the most up-to-date and accurate info relating to eligibility, claiming procedures, and readily available help.
Less than 100. If the employer had 100 or less staff members on average in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. Simply put, even if the.
workers worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not simply money payments however likewise a part of the cost of company.
offered health care. Employee Retention Credit Suspension Test
Payment.
Companies can be immediately compensated for the credit by minimizing the quantity of payroll taxes they.