Lets talk first about Employee Retention Credit Timeline :
Our group here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly offer a lovely breakfast and have individuals truly learn about the program we should head to the room where we are able to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I indicate you know if you simply start to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean consider the number of actual clients that went through the program yeah this is the very end this is the celebration 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 consumer so that’s how you’re able to track it you understand when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they really get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the process has actually been finished and the number of you think you have actually processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you need 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 Terrific here you’re at my YouTube channel we’re discussing something really important today the worker retention credit which the majority of you have never heard of I certainly had not heard of it until really just recently and learned a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank manager and state 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 ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations three 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 distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I just need to make certain we got that point I imply that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re speaking about all right 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 tough check in the mail where you get real money from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s staff member retention credit that person 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 employees right you needed to have owned a service however it’s based on you having W-2 employees 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 first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. okay 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 cash how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’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 employee’s income to an optimum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wanted 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 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with 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 great deal of cash it is now there’s a caution here the PPP cash would have to be reduced 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 typically Kevin is if you took PPP cash someplace around ten thousand dollars a person 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 money you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big question is why does no one learn about this since look when I initially became aware of this when I first met Josh you know I’ve got lots of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in business owners of which lots of suffered through the pandemic when I initially became aware of 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 extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized 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 called to my political leader buddies Guv Senators they didn’t understand about it I indicate that’s how you understand that’s how false information is that there’s no information out there then a lot of people 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 know what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely clear that if you wanted 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 procedure process that’s all um and here there was chaos because keep in mind in the initial cares act you might not do both programs so if you had actually done PPP you might refrain from doing 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 federal government never ever made it clear to any person about how to.
do this does your CFO know how to do this not truly she or he’s never done it previously 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 accounting professional no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity 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 designed to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Since of COVID-19 or whose gross invoices, company whose company is fully or partially suspended.
decrease by more than 50%.
Schedule.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partly 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 similar quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings 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 incomes differs by whether a company had, on average, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing help typically supply proficiency and assistance to help organizations navigate the intricate procedure of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Timeline
Eligibility Assessment: These companies will assess your business’s eligibility for the ERC based on factors such as your market, profits, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can claim, they can help identify.
Documentation and Calculation: ERC filing services will assist in gathering the required paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based upon eligible incomes and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to identify possible opportunities for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the necessary types and paperwork in your place. This consists of completing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually developed gradually. These business stay upgraded with the most recent modifications and make sure that your filings comply with the most current guidelines. They can likewise offer continuous support if the internal revenue service requests extra details or performs an audit related to your ERC claim.
It is necessary to research study and vet any company offering ERC filing support to guarantee their reliability and proficiency. Look for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who use ERC filing support.
Bear in mind that while these companies can offer important help, it’s constantly a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to keep and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, employers must fulfill one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (up to 70%) of qualified salaries paid to workers, including specific health plan expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, permitting qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for organizations to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Type 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have developed in time. The best strategy is to speak with a tax professional or go to the main internal revenue service site for the most updated and in-depth information concerning the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a business should satisfy one of the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that got a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC involves completing the necessary forms and consisting of the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can differ based on a number of factors, consisting of the complexity of your organization and the workload of the IRS. It’s suggested to consult with a tax professional for guidance specific to your scenario.
There are several business that can help with the procedure of declaring the ERC. Some popular companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on basic knowledge and may not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax professional or check out the official IRS site for the most up-to-date and precise info concerning eligibility, declaring treatments, and offered help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on earnings paid to all employees whether they actually worked or not. Simply put, even if the.
workers worked full time and made 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.
allowed only for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments but also a portion of the expense of company.
provided health care. Employee Retention Credit Timeline
Payment.
Employers can be right away repaid for the credit by minimizing the quantity of payroll taxes they.