Lets talk first about Employee Retention Credit Taxability :
Our team here what do these people doing everyone in this room is helping teach people about ERC and uh constantly supply a beautiful breakfast and have people actually learn about the program we need to head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I mean you know if you simply 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 mean it’s just I indicate 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 confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
receive this you understand 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 until this letter is confirmed the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the process has been finished and the number of you think you’ve processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need you need experts 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 Fantastic here you’re at my YouTube channel we’re discussing something truly important today the worker retention credit which most of you have actually never become aware of I definitely had not become aware of it till extremely recently and found out a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist 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 hard this isn’t like PPP we just contact your bank supervisor 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 us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson 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 start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there 2 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 alright go on sorry I just have to ensure we got that point I indicate that’s a big difference a loan versus cash cash I like cash cash that’s what we’re talking about fine 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 lovely difficult check in the mail where you get real cash from the IRS all right so let’s speak about how it works because it sounds 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 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 but it’s based on 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 qualified so you need 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 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part money 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 five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because 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 approximately five thousand Max and after that what occurs 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 six thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average 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 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 IRS so it’s huge obviously now the huge question is why does no one understand about this because look when I initially heard about this when I initially fulfilled Josh you understand I’ve got great deals of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I do not believe it because I utilize 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 carefully to stay alive throughout the pandemic so when I found out about this I said 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 mean that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s fascinating you’re speaking about the banks Kevin because 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 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 original cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC since 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 really he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah some 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 firm Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business customers have worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property 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 as much as $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose organization is completely or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company 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 company is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing assistance usually provide knowledge and assistance to assist companies navigate the complex procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Taxability
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based on aspects such as your market, earnings, and operations. They can assist identify if you meet the requirements for the credit and determine the optimum credit quantity you can declare.
Documents and Calculation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will likewise help compute the credit amount based upon eligible salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the needed forms and documents in your place. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have actually progressed gradually. These business remain upgraded with the current modifications and guarantee that your filings comply with the most existing standards. If the Internal revenue service demands additional details or performs an audit associated to your ERC claim, they can also supply continuous support.
It is necessary to research and veterinarian any company using ERC filing support to ensure their credibility and proficiency. Try to find established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who use ERC filing assistance.
Bear in mind that while these companies can provide valuable support, it’s constantly a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to keep and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To certify, companies must satisfy one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts 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 portion (up to 70%) of certified incomes paid to employees, including particular health insurance 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: Initially, organizations that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, allowing qualified companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for businesses to amend prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Type 941. The excess can be refunded to the employer if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have developed with time. The best strategy is to consult with a tax expert or visit the official IRS site for the most updated and comprehensive information concerning the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, a company must meet among the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and businesses that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes finishing the essential kinds and consisting of the credit on your work tax return (normally Type 941). The exact time it takes to process the credit can differ based upon several aspects, including the complexity of your service and the workload of the internal revenue service. It’s advised to seek advice from a tax expert for guidance particular to your scenario.
There are a number of business that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some well-known business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these business directly to inquire about their services and charges.
Please note that the info offered here is based on general understanding and might not reflect the most recent updates or changes to the ERC. It is very important to consult with a tax professional or go to the main internal revenue service website for the most up-to-date and precise details relating to eligibility, declaring treatments, and readily available assistance.
Less than 100. If the employer had 100 or less staff members usually in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. In other words, even if the.
employees worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” consists of not just money payments however also a part of the cost of employer.
supplied healthcare. Employee Retention Credit Taxability
Employers can be right away reimbursed for the credit by lowering the amount of payroll taxes they.